Correlation Between Mackenzie Floating and Global X

Can any of the company-specific risk be diversified away by investing in both Mackenzie Floating 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 Floating 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 Floating Rate and Global X Gold, you can compare the effects of market volatilities on Mackenzie Floating 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 Floating with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Floating and Global X.

Diversification Opportunities for Mackenzie Floating and Global X

-0.57

Correlation Coefficient

Mackenzie Floating  Global X

Excellent diversification

The 3 months correlation between Mackenzie and Global is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Floating Rate and Global X Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Gold and Mackenzie Floating 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 Floating Rate 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 Gold has no effect on the direction of Mackenzie Floating i.e., Mackenzie Floating and Global X go up and down completely randomly.

Pair Corralation between Mackenzie Floating and Global X

Assuming the 90 days trading horizon Mackenzie Floating is expected to generate 2.22 times less return on investment than Global X. But when comparing it to its historical volatility, Mackenzie Floating Rate is 6.95 times less risky than Global X. It trades about 0.14 of its potential returns per unit of risk. Global X Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,993  in Global X Gold on October 6, 2024 and sell it today you would earn a total of  678.00  from holding Global X Gold or generate 34.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Mackenzie Floating Rate  vs.  Global X Gold

Mackenzie Floating Rate

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Floating Rate are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Floating is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Global X Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Gold has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Floating and Global X

The main advantage of trading using opposite Mackenzie Floating and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Floating 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 Floating Rate and Global X Gold 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.