Correlation Between CI Global and CI Canadian
Can any of the company-specific risk be diversified away by investing in both CI Global and CI Canadian 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 Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Global REIT and CI Canadian REIT, you can compare the effects of market volatilities on CI Global and CI Canadian 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 Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and CI Canadian.
Diversification Opportunities for CI Global and CI Canadian
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CGRE and RIT is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CI Global REIT and CI Canadian REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian REIT 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 REIT are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian REIT has no effect on the direction of CI Global i.e., CI Global and CI Canadian go up and down completely randomly.
Pair Corralation between CI Global and CI Canadian
Assuming the 90 days trading horizon CI Global REIT is expected to generate 0.99 times more return on investment than CI Canadian. However, CI Global REIT is 1.01 times less risky than CI Canadian. It trades about 0.05 of its potential returns per unit of risk. CI Canadian REIT is currently generating about 0.03 per unit of risk. If you would invest 1,886 in CI Global REIT on August 27, 2024 and sell it today you would earn a total of 317.00 from holding CI Global REIT or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Global REIT vs. CI Canadian REIT
Performance |
| Timeline |
| CI Global REIT |
| CI Canadian REIT |
CI Global and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Global and CI Canadian
The main advantage of trading using opposite CI Global and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global position performs unexpectedly, CI Canadian 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 Canadian will offset losses from the drop in CI Canadian's long position.| CI Global vs. iShares SPTSX Capped | CI Global vs. iShares Canadian Select | CI Global vs. iShares SPTSX Capped | CI Global vs. iShares Diversified Monthly |
| CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. iShares Canadian Select | CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. iShares Diversified Monthly |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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