Correlation Between CI Galaxy and CI Preferred
Can any of the company-specific risk be diversified away by investing in both CI Galaxy and CI Preferred 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 Galaxy and CI Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Galaxy Blockchain and CI Preferred Share, you can compare the effects of market volatilities on CI Galaxy and CI Preferred 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 Galaxy with a short position of CI Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Galaxy and CI Preferred.
Diversification Opportunities for CI Galaxy and CI Preferred
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CBCX and FPR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CI Galaxy Blockchain and CI Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Preferred Share and CI Galaxy 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 Galaxy Blockchain are associated (or correlated) with CI Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Preferred Share has no effect on the direction of CI Galaxy i.e., CI Galaxy and CI Preferred go up and down completely randomly.
Pair Corralation between CI Galaxy and CI Preferred
Assuming the 90 days trading horizon CI Galaxy Blockchain is expected to under-perform the CI Preferred. In addition to that, CI Galaxy is 10.54 times more volatile than CI Preferred Share. It trades about -0.29 of its total potential returns per unit of risk. CI Preferred Share is currently generating about 0.03 per unit of volatility. If you would invest 2,343 in CI Preferred Share on December 1, 2024 and sell it today you would earn a total of 4.00 from holding CI Preferred Share or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Galaxy Blockchain vs. CI Preferred Share
Performance |
| Timeline |
| CI Galaxy Blockchain |
| CI Preferred Share |
CI Galaxy and CI Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Galaxy and CI Preferred
The main advantage of trading using opposite CI Galaxy and CI Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Galaxy position performs unexpectedly, CI Preferred 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 Preferred will offset losses from the drop in CI Preferred's long position.| CI Galaxy vs. NBI High Yield | CI Galaxy vs. NBI Unconstrained Fixed | CI Galaxy vs. Mackenzie Developed ex North | CI Galaxy vs. BMO Short Term Bond |
| CI Preferred vs. Dynamic Active Preferred | CI Preferred vs. CI Global Financial | CI Preferred vs. CI Enhanced Short | CI Preferred vs. First Asset Morningstar |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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