Correlation Between Mackenzie All and Global Healthcare

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Can any of the company-specific risk be diversified away by investing in both Mackenzie All and Global Healthcare 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 All and Global Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie All Cap and Global Healthcare Income, you can compare the effects of market volatilities on Mackenzie All and Global Healthcare 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 All with a short position of Global Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie All and Global Healthcare.

Diversification Opportunities for Mackenzie All and Global Healthcare

MackenzieGlobalDiversified AwayMackenzieGlobalDiversified Away100%
-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Mackenzie and Global is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie All Cap and Global Healthcare Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Healthcare Income and Mackenzie All 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 All Cap are associated (or correlated) with Global Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Healthcare Income has no effect on the direction of Mackenzie All i.e., Mackenzie All and Global Healthcare go up and down completely randomly.

Pair Corralation between Mackenzie All and Global Healthcare

Assuming the 90 days trading horizon Mackenzie All Cap is expected to generate 0.96 times more return on investment than Global Healthcare. However, Mackenzie All Cap is 1.05 times less risky than Global Healthcare. It trades about 0.27 of its potential returns per unit of risk. Global Healthcare Income is currently generating about -0.18 per unit of risk. If you would invest  5,295  in Mackenzie All Cap on September 15, 2024 and sell it today you would earn a total of  915.00  from holding Mackenzie All Cap or generate 17.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Mackenzie All Cap  vs.  Global Healthcare Income

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -5051015
JavaScript chart by amCharts 3.21.15MFC4644 HIG
       Timeline  
Mackenzie All Cap 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie All Cap are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Mackenzie All sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec53545556575859606162
Global Healthcare Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global Healthcare Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec7.988.18.28.38.48.58.68.78.8

Mackenzie All and Global Healthcare Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.75-2.06-1.37-0.680.00.791.592.383.18 0.10.20.30.4
JavaScript chart by amCharts 3.21.15MFC4644 HIG
       Returns  

Pair Trading with Mackenzie All and Global Healthcare

The main advantage of trading using opposite Mackenzie All and Global Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie All position performs unexpectedly, Global Healthcare 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 Healthcare will offset losses from the drop in Global Healthcare's long position.
The idea behind Mackenzie All Cap and Global Healthcare Income 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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