Correlation Between Brompton Global and CI ONE
Can any of the company-specific risk be diversified away by investing in both Brompton Global and CI ONE 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 Brompton Global and CI ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Global Dividend and CI ONE Global, you can compare the effects of market volatilities on Brompton Global and CI ONE 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 Brompton Global with a short position of CI ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Global and CI ONE.
Diversification Opportunities for Brompton Global and CI ONE
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brompton and ONEQ is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Global Dividend and CI ONE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI ONE Global and Brompton Global 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 Brompton Global Dividend are associated (or correlated) with CI ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI ONE Global has no effect on the direction of Brompton Global i.e., Brompton Global and CI ONE go up and down completely randomly.
Pair Corralation between Brompton Global and CI ONE
Assuming the 90 days trading horizon Brompton Global Dividend is expected to generate 1.0 times more return on investment than CI ONE. However, Brompton Global Dividend is 1.0 times less risky than CI ONE. It trades about 0.15 of its potential returns per unit of risk. CI ONE Global is currently generating about 0.11 per unit of risk. If you would invest 1,883 in Brompton Global Dividend on September 1, 2024 and sell it today you would earn a total of 394.00 from holding Brompton Global Dividend or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Brompton Global Dividend vs. CI ONE Global
Performance |
| Timeline |
| Brompton Global Dividend |
| CI ONE Global |
Brompton Global and CI ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Global and CI ONE
The main advantage of trading using opposite Brompton Global and CI ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Global position performs unexpectedly, CI ONE 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 ONE will offset losses from the drop in CI ONE's long position.| Brompton Global vs. Global Healthcare Income | Brompton Global vs. Tech Leaders Income | Brompton Global vs. Brompton North American | Brompton Global vs. Brompton European Dividend |
| CI ONE vs. Brompton Global Dividend | CI ONE vs. Brompton European Dividend | CI ONE vs. Brompton North American | CI ONE vs. Global Healthcare Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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