Correlation Between CI Canadian and CI Marret
Can any of the company-specific risk be diversified away by investing in both CI Canadian and CI Marret 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 CI Canadian and CI Marret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canadian Aggregate and CI Marret Alternative, you can compare the effects of market volatilities on CI Canadian and CI Marret 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 CI Canadian with a short position of CI Marret. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and CI Marret.
Diversification Opportunities for CI Canadian and CI Marret
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CAGG and CMAR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Aggregate and CI Marret Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Marret Alternative and CI Canadian 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 CI Canadian Aggregate are associated (or correlated) with CI Marret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Marret Alternative has no effect on the direction of CI Canadian i.e., CI Canadian and CI Marret go up and down completely randomly.
Pair Corralation between CI Canadian and CI Marret
Assuming the 90 days trading horizon CI Canadian is expected to generate 1.01 times less return on investment than CI Marret. In addition to that, CI Canadian is 1.15 times more volatile than CI Marret Alternative. It trades about 0.16 of its total potential returns per unit of risk. CI Marret Alternative is currently generating about 0.18 per unit of volatility. If you would invest 1,813 in CI Marret Alternative on December 1, 2024 and sell it today you would earn a total of 25.00 from holding CI Marret Alternative or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canadian Aggregate vs. CI Marret Alternative
Performance |
| Timeline |
| CI Canadian Aggregate |
| CI Marret Alternative |
CI Canadian and CI Marret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and CI Marret
The main advantage of trading using opposite CI Canadian and CI Marret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, CI Marret 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 Marret will offset losses from the drop in CI Marret's long position.| CI Canadian vs. NBI High Yield | CI Canadian vs. NBI Unconstrained Fixed | CI Canadian vs. Mackenzie Developed ex North | CI Canadian vs. BMO Short Term Bond |
| CI Marret vs. CI Munro Alternative | CI Marret vs. CI Lawrence Park | CI Marret vs. CI Enhanced Short | CI Marret vs. CI Enhanced Government |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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