Correlation Between CI Financial and Amazon CDR
Can any of the company-specific risk be diversified away by investing in both CI Financial and Amazon CDR 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 Financial and Amazon CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Financial Corp and Amazon CDR, you can compare the effects of market volatilities on CI Financial and Amazon CDR 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 Financial with a short position of Amazon CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Amazon CDR.
Diversification Opportunities for CI Financial and Amazon CDR
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIX and Amazon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Amazon CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon CDR and CI Financial 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 Financial Corp are associated (or correlated) with Amazon CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon CDR has no effect on the direction of CI Financial i.e., CI Financial and Amazon CDR go up and down completely randomly.
Pair Corralation between CI Financial and Amazon CDR
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 3.46 times more return on investment than Amazon CDR. However, CI Financial is 3.46 times more volatile than Amazon CDR. It trades about 0.24 of its potential returns per unit of risk. Amazon CDR is currently generating about 0.2 per unit of risk. If you would invest 2,285 in CI Financial Corp on September 4, 2024 and sell it today you would earn a total of 819.00 from holding CI Financial Corp or generate 35.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CI Financial Corp vs. Amazon CDR
Performance |
| Timeline |
| CI Financial Corp |
| Amazon CDR |
CI Financial and Amazon CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Amazon CDR
The main advantage of trading using opposite CI Financial and Amazon CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Amazon CDR 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 Amazon CDR will offset losses from the drop in Amazon CDR's long position.| CI Financial vs. IGM Financial | CI Financial vs. iA Financial | CI Financial vs. Canadian Western Bank | CI Financial vs. Great West Lifeco |
| Amazon CDR vs. Ramp Metals | Amazon CDR vs. Exco Technologies Limited | Amazon CDR vs. NeXGold Mining Corp | Amazon CDR vs. American Hotel Income |
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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