Correlation Between CI Financial and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both CI Financial and Sprott Physical 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 Sprott Physical 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 Sprott Physical Gold, you can compare the effects of market volatilities on CI Financial and Sprott Physical 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 Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Sprott Physical.
Diversification Opportunities for CI Financial and Sprott Physical
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CIX and Sprott is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of CI Financial i.e., CI Financial and Sprott Physical go up and down completely randomly.
Pair Corralation between CI Financial and Sprott Physical
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 1.99 times more return on investment than Sprott Physical. However, CI Financial is 1.99 times more volatile than Sprott Physical Gold. It trades about 0.17 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.1 per unit of risk. If you would invest 1,068 in CI Financial Corp on September 14, 2024 and sell it today you would earn a total of 2,034 from holding CI Financial Corp or generate 190.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Financial Corp vs. Sprott Physical Gold
Performance |
| Timeline |
| CI Financial Corp |
| Sprott Physical Gold |
CI Financial and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Sprott Physical
The main advantage of trading using opposite CI Financial and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.| CI Financial vs. Berkshire Hathaway CDR | CI Financial vs. E L Financial Corp | CI Financial vs. E L Financial 3 | CI Financial vs. Molson Coors Canada |
| Sprott Physical vs. CI Financial Corp | Sprott Physical vs. Canso Credit Trust | Sprott Physical vs. Canadian Imperial Bank | Sprott Physical vs. National Bank of |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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