Correlation Between Brompton North and CI Global
Can any of the company-specific risk be diversified away by investing in both Brompton North and CI 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 Brompton North and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton North American and CI Global Real, you can compare the effects of market volatilities on Brompton North and CI 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 Brompton North with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton North and CI Global.
Diversification Opportunities for Brompton North and CI Global
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brompton and CGRA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Brompton North American and CI Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Real and Brompton North 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 North American are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Real has no effect on the direction of Brompton North i.e., Brompton North and CI Global go up and down completely randomly.
Pair Corralation between Brompton North and CI Global
Assuming the 90 days trading horizon Brompton North American is expected to generate 0.64 times more return on investment than CI Global. However, Brompton North American is 1.57 times less risky than CI Global. It trades about 0.44 of its potential returns per unit of risk. CI Global Real is currently generating about 0.16 per unit of risk. If you would invest 2,310 in Brompton North American on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Brompton North American or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton North American vs. CI Global Real
Performance |
| Timeline |
| Brompton North American |
| CI Global Real |
Brompton North and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton North and CI Global
The main advantage of trading using opposite Brompton North and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton North position performs unexpectedly, CI 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 CI Global will offset losses from the drop in CI Global's long position.| Brompton North vs. Brompton Sustainable Real | Brompton North vs. Brompton Global Dividend | Brompton North vs. Brompton North American | Brompton North vs. Brompton European Dividend |
| CI Global vs. CI Global REIT | CI Global vs. CI Global Infrastructure | CI Global vs. CI Global Asset | CI Global vs. CI Marret Alternative |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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