Correlation Between CI Global and CI ONE
Can any of the company-specific risk be diversified away by investing in both CI 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 CI 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 CI Global Real and CI ONE Global, you can compare the effects of market volatilities on CI 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 CI Global with a short position of CI ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and CI ONE.
Diversification Opportunities for CI Global and CI ONE
Very weak diversification
The 3 months correlation between CGRA and ONEQ is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Real 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 CI 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 CI Global Real 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 CI Global i.e., CI Global and CI ONE go up and down completely randomly.
Pair Corralation between CI Global and CI ONE
Assuming the 90 days trading horizon CI Global is expected to generate 1.76 times less return on investment than CI ONE. But when comparing it to its historical volatility, CI Global Real is 1.09 times less risky than CI ONE. It trades about 0.04 of its potential returns per unit of risk. CI ONE Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,353 in CI ONE Global on August 30, 2024 and sell it today you would earn a total of 45.00 from holding CI ONE Global or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Global Real vs. CI ONE Global
Performance |
| Timeline |
| CI Global Real |
| CI ONE Global |
CI Global and CI ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Global and CI ONE
The main advantage of trading using opposite CI Global and CI ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI 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.| CI Global vs. CI Global REIT | CI Global vs. CI Global Infrastructure | CI Global vs. CI Global Asset | CI Global vs. CI Marret Alternative |
| CI ONE vs. Guardian i3 Global | CI ONE vs. CI Global Real | CI ONE vs. CI Enhanced Short | CI ONE vs. BMO Aggregate Bond |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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