Correlation Between Mackenzie Aggregate and Mackenzie Global

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

By analyzing existing cross correlation between Mackenzie Aggregate Bond and Mackenzie Global Fixed, you can compare the effects of market volatilities on Mackenzie Aggregate and Mackenzie 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 Aggregate with a short position of Mackenzie Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Aggregate and Mackenzie Global.

Diversification Opportunities for Mackenzie Aggregate and Mackenzie Global

0.8

Correlation Coefficient

Mackenzie Aggregate  Mackenzie Global

Very poor diversification

The 3 months correlation between Mackenzie and Mackenzie is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Aggregate Bond and Mackenzie Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Global Fixed and Mackenzie Aggregate 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 Aggregate Bond are associated (or correlated) with Mackenzie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Global Fixed has no effect on the direction of Mackenzie Aggregate i.e., Mackenzie Aggregate and Mackenzie Global go up and down completely randomly.

Pair Corralation between Mackenzie Aggregate and Mackenzie Global

Assuming the 90 days trading horizon Mackenzie Aggregate Bond is expected to generate 1.65 times more return on investment than Mackenzie Global. However, Mackenzie Aggregate is 1.65 times more volatile than Mackenzie Global Fixed. It trades about 0.08 of its potential returns per unit of risk. Mackenzie Global Fixed is currently generating about 0.11 per unit of risk. If you would invest  7,967  in Mackenzie Aggregate Bond on December 30, 2024 and sell it today you would earn a total of  156.00  from holding Mackenzie Aggregate Bond or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Mackenzie Aggregate Bond  vs.  Mackenzie Global Fixed

Mackenzie Aggregate Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Aggregate Bond are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Mackenzie Aggregate is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Global Fixed

Risk-Adjusted Performance

OK

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

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

The idea behind Mackenzie Aggregate Bond and Mackenzie Global Fixed 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.