Correlation Between Mackenzie Global and CI Global

Can any of the company-specific risk be diversified away by investing in both Mackenzie Global and CI Global 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 CI Global 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 CI Global Climate, you can compare the effects of market volatilities on Mackenzie Global and CI Global 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 CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Global and CI Global.

Diversification Opportunities for Mackenzie Global and CI Global

-0.56

Correlation Coefficient

Mackenzie Global  CI Global

Excellent diversification

The 3 months correlation between Mackenzie and CLML is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Global Sustainable and CI Global Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Climate 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 CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Climate has no effect on the direction of Mackenzie Global i.e., Mackenzie Global and CI Global go up and down completely randomly.

Pair Corralation between Mackenzie Global and CI Global

Assuming the 90 days trading horizon Mackenzie Global Sustainable is expected to generate 0.54 times more return on investment than CI Global. However, Mackenzie Global Sustainable is 1.84 times less risky than CI Global. It trades about 0.16 of its potential returns per unit of risk. CI Global Climate is currently generating about 0.05 per unit of risk. If you would invest  2,578  in Mackenzie Global Sustainable on December 10, 2024 and sell it today you would earn a total of  292.00  from holding Mackenzie Global Sustainable or generate 11.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.29%
Values	Daily Returns

Mackenzie Global Sustainable  vs.  CI Global Climate

Mackenzie Global Sus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Global Sustainable are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mackenzie Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CI Global Climate

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Global Climate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CI Global 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 CI Global

The main advantage of trading using opposite Mackenzie Global and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Global position performs unexpectedly, CI Global 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 CI Global will offset losses from the drop in CI Global's long position.

The idea behind Mackenzie Global Sustainable and CI Global Climate 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.