Correlation Between CI Gold and CI Canada
Can any of the company-specific risk be diversified away by investing in both CI Gold and CI Canada 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 Gold and CI Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Gold Giants and CI Canada Lifeco, you can compare the effects of market volatilities on CI Gold and CI Canada 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 Gold with a short position of CI Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Gold and CI Canada.
Diversification Opportunities for CI Gold and CI Canada
Modest diversification
The 3 months correlation between CGXF and FLI is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Giants and CI Canada Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canada Lifeco and CI Gold 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 Gold Giants are associated (or correlated) with CI Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canada Lifeco has no effect on the direction of CI Gold i.e., CI Gold and CI Canada go up and down completely randomly.
Pair Corralation between CI Gold and CI Canada
Assuming the 90 days trading horizon CI Gold is expected to generate 1.44 times less return on investment than CI Canada. In addition to that, CI Gold is 1.53 times more volatile than CI Canada Lifeco. It trades about 0.03 of its total potential returns per unit of risk. CI Canada Lifeco is currently generating about 0.06 per unit of volatility. If you would invest 881.00 in CI Canada Lifeco on August 30, 2024 and sell it today you would earn a total of 316.00 from holding CI Canada Lifeco or generate 35.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CI Gold Giants vs. CI Canada Lifeco
Performance |
Timeline |
CI Gold Giants |
CI Canada Lifeco |
CI Gold and CI Canada Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CI Gold and CI Canada
The main advantage of trading using opposite CI Gold and CI Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Gold position performs unexpectedly, CI Canada 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 Canada will offset losses from the drop in CI Canada's long position.CI Gold vs. First Asset Energy | CI Gold vs. First Asset Tech | CI Gold vs. Harvest Equal Weight | CI Gold vs. CI Canada Lifeco |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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