Correlation Between Mackenzie International and Global X

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

Diversification Opportunities for Mackenzie International and Global X

0.08

Correlation Coefficient

Mackenzie International  Global X

Significant diversification

The 3 months correlation between Mackenzie and Global is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie International Equity and Global X Seasonal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Seasonal and Mackenzie International 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 International Equity 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 Seasonal has no effect on the direction of Mackenzie International i.e., Mackenzie International and Global X go up and down completely randomly.

Pair Corralation between Mackenzie International and Global X

Assuming the 90 days trading horizon Mackenzie International Equity is expected to generate 1.07 times more return on investment than Global X. However, Mackenzie International is 1.07 times more volatile than Global X Seasonal. It trades about 0.14 of its potential returns per unit of risk. Global X Seasonal is currently generating about -0.13 per unit of risk. If you would invest  12,177  in Mackenzie International Equity on December 11, 2024 and sell it today you would earn a total of  826.00  from holding Mackenzie International Equity or generate 6.78% return on investment over 90 days.

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

Mackenzie International Equity  vs.  Global X Seasonal

Mackenzie International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie International Equity are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mackenzie International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Global X Seasonal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Seasonal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental 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 International and Global X

The main advantage of trading using opposite Mackenzie International and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie International 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 International Equity and Global X Seasonal 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.