Correlation Between CI Financial and KDA
Can any of the company-specific risk be diversified away by investing in both CI Financial and KDA 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 KDA 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 KDA Group, you can compare the effects of market volatilities on CI Financial and KDA 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 KDA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and KDA.
Diversification Opportunities for CI Financial and KDA
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIX and KDA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and KDA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDA Group 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 KDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDA Group has no effect on the direction of CI Financial i.e., CI Financial and KDA go up and down completely randomly.
Pair Corralation between CI Financial and KDA
Assuming the 90 days trading horizon CI Financial is expected to generate 1.06 times less return on investment than KDA. In addition to that, CI Financial is 1.9 times more volatile than KDA Group. It trades about 0.2 of its total potential returns per unit of risk. KDA Group is currently generating about 0.4 per unit of volatility. If you would invest 21.00 in KDA Group on September 15, 2024 and sell it today you would earn a total of 7.00 from holding KDA Group or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Financial Corp vs. KDA Group
Performance |
| Timeline |
| CI Financial Corp |
| KDA Group |
CI Financial and KDA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and KDA
The main advantage of trading using opposite CI Financial and KDA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, KDA 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 KDA will offset losses from the drop in KDA'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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