Correlation Between Mackenzie Developed and CI Gold

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

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

Diversification Opportunities for Mackenzie Developed and CI Gold

0.37

Correlation Coefficient

Mackenzie Developed  CI Gold

Weak diversification

The 3 months correlation between Mackenzie and VALT is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Developed ex North and CI Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Bullion and Mackenzie Developed 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 Developed ex North are associated (or correlated) with CI Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Bullion has no effect on the direction of Mackenzie Developed i.e., Mackenzie Developed and CI Gold go up and down completely randomly.

Pair Corralation between Mackenzie Developed and CI Gold

Assuming the 90 days trading horizon Mackenzie Developed is expected to generate 87.0 times less return on investment than CI Gold. But when comparing it to its historical volatility, Mackenzie Developed ex North is 4.6 times less risky than CI Gold. It trades about 0.0 of its potential returns per unit of risk. CI Gold Bullion is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,100  in CI Gold Bullion on April 24, 2025 and sell it today you would earn a total of  87.00  from holding CI Gold Bullion or generate 2.12% return on investment over 90 days.

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

Mackenzie Developed ex North  vs.  CI Gold Bullion

Mackenzie Developed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mackenzie Developed ex North has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Mackenzie Developed is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Gold Bullion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Bullion are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Gold 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 Developed and CI Gold

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

The idea behind Mackenzie Developed ex North and CI Gold Bullion 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 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.