Correlation Between CI Financial and Clarke
Can any of the company-specific risk be diversified away by investing in both CI Financial and Clarke 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 Clarke 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 Clarke Inc, you can compare the effects of market volatilities on CI Financial and Clarke 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 Clarke. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Clarke.
Diversification Opportunities for CI Financial and Clarke
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CIX and Clarke is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Clarke Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarke Inc 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 Clarke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarke Inc has no effect on the direction of CI Financial i.e., CI Financial and Clarke go up and down completely randomly.
Pair Corralation between CI Financial and Clarke
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.56 times more return on investment than Clarke. However, CI Financial Corp is 1.8 times less risky than Clarke. It trades about 0.09 of its potential returns per unit of risk. Clarke Inc is currently generating about -0.08 per unit of risk. If you would invest 3,106 in CI Financial Corp on November 3, 2024 and sell it today you would earn a total of 11.00 from holding CI Financial Corp or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Financial Corp vs. Clarke Inc
Performance |
| Timeline |
| CI Financial Corp |
| Clarke Inc |
CI Financial and Clarke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Clarke
The main advantage of trading using opposite CI Financial and Clarke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Clarke 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 Clarke will offset losses from the drop in Clarke'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 |
| Clarke vs. Terravest Capital | Clarke vs. Clairvest Group | Clarke vs. Algoma Central | Clarke vs. Accord Financial Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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