Correlation Between CI Financial and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both CI Financial and Diamond Estates 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 Diamond Estates 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 Diamond Estates Wines, you can compare the effects of market volatilities on CI Financial and Diamond Estates 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 Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Diamond Estates.
Diversification Opportunities for CI Financial and Diamond Estates
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CIX and Diamond is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines 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 Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of CI Financial i.e., CI Financial and Diamond Estates go up and down completely randomly.
Pair Corralation between CI Financial and Diamond Estates
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.08 times more return on investment than Diamond Estates. However, CI Financial Corp is 11.96 times less risky than Diamond Estates. It trades about -0.01 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about -0.06 per unit of risk. If you would invest 3,092 in CI Financial Corp on September 26, 2024 and sell it today you would lose (2.00) from holding CI Financial Corp or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Financial Corp vs. Diamond Estates Wines
Performance |
| Timeline |
| CI Financial Corp |
| Diamond Estates Wines |
CI Financial and Diamond Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Diamond Estates
The main advantage of trading using opposite CI Financial and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.| CI Financial vs. IGM Financial | CI Financial vs. iA Financial | CI Financial vs. Canadian Western Bank | CI Financial vs. Great West Lifeco |
| Diamond Estates vs. Nova Leap Health | Diamond Estates vs. Canlan Ice Sports | Diamond Estates vs. QC Copper and | Diamond Estates vs. Reliq Health Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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