Correlation Between Mackenzie Core and CI Enhanced

Can any of the company-specific risk be diversified away by investing in both Mackenzie Core and CI Enhanced 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 Core and CI Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mackenzie Core Plus and CI Enhanced Government, you can compare the effects of market volatilities on Mackenzie Core and CI Enhanced 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 Core with a short position of CI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Core and CI Enhanced.

Diversification Opportunities for Mackenzie Core and CI Enhanced

0.89

Correlation Coefficient

Mackenzie Core  CI Enhanced

Very poor diversification

The 3 months correlation between Mackenzie and FGO is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and CI Enhanced Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Enhanced Government and Mackenzie Core 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 Core Plus are associated (or correlated) with CI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Enhanced Government has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and CI Enhanced go up and down completely randomly.

Pair Corralation between Mackenzie Core and CI Enhanced

Assuming the 90 days trading horizon Mackenzie Core is expected to generate 1.79 times less return on investment than CI Enhanced. In addition to that, Mackenzie Core is 1.2 times more volatile than CI Enhanced Government. It trades about 0.05 of its total potential returns per unit of risk. CI Enhanced Government is currently generating about 0.11 per unit of volatility. If you would invest  984.00  in CI Enhanced Government on December 30, 2024 and sell it today you would earn a total of  25.00  from holding CI Enhanced Government or generate 2.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Mackenzie Core Plus  vs.  CI Enhanced Government

Mackenzie Core Plus

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Core Plus are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Mackenzie Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Enhanced Government

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Enhanced Government are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Enhanced 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 Core and CI Enhanced

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

The idea behind Mackenzie Core Plus and CI Enhanced Government 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.