Correlation Between Mackenzie Global and GLOBAL X

Can any of the company-specific risk be diversified away by investing in both Mackenzie Global and GLOBAL X at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mackenzie Global and GLOBAL X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mackenzie Global Sustainable and GLOBAL X HIGH, you can compare the effects of market volatilities on Mackenzie Global and GLOBAL X and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mackenzie Global with a short position of GLOBAL X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Global and GLOBAL X.

Diversification Opportunities for Mackenzie Global and GLOBAL X

0.89

Correlation Coefficient

Mackenzie Global  GLOBAL X

Very poor diversification

The 3 months correlation between Mackenzie and GLOBAL is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Global Sustainable and GLOBAL X HIGH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL X HIGH and Mackenzie Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mackenzie Global Sustainable are associated (or correlated) with GLOBAL X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL X HIGH has no effect on the direction of Mackenzie Global i.e., Mackenzie Global and GLOBAL X go up and down completely randomly.

Pair Corralation between Mackenzie Global and GLOBAL X

Assuming the 90 days trading horizon Mackenzie Global Sustainable is expected to generate 49.64 times more return on investment than GLOBAL X. However, Mackenzie Global is 49.64 times more volatile than GLOBAL X HIGH. It trades about 0.07 of its potential returns per unit of risk. GLOBAL X HIGH is currently generating about 0.65 per unit of risk. If you would invest  2,667  in Mackenzie Global Sustainable on September 22, 2024 and sell it today you would earn a total of  29.00  from holding Mackenzie Global Sustainable or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	81.82%
Values	Daily Returns

Mackenzie Global Sustainable  vs.  GLOBAL X HIGH

Mackenzie Global Sus

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Global Sustainable are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

GLOBAL X HIGH

Risk-Adjusted Performance

59 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBAL X HIGH are ranked lower than 59 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GLOBAL X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mackenzie Global and GLOBAL X

The main advantage of trading using opposite Mackenzie Global and GLOBAL X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Global position performs unexpectedly, GLOBAL X can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GLOBAL X will offset losses from the drop in GLOBAL X's long position.

The idea behind Mackenzie Global Sustainable and GLOBAL X HIGH pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.