Correlation Between CI Financial and Precious Metals
Can any of the company-specific risk be diversified away by investing in both CI Financial and Precious Metals 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 Precious Metals 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 Precious Metals And, you can compare the effects of market volatilities on CI Financial and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Precious Metals.
Diversification Opportunities for CI Financial and Precious Metals
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CIX and Precious is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of CI Financial i.e., CI Financial and Precious Metals go up and down completely randomly.
Pair Corralation between CI Financial and Precious Metals
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 1.27 times more return on investment than Precious Metals. However, CI Financial is 1.27 times more volatile than Precious Metals And. It trades about 0.09 of its potential returns per unit of risk. Precious Metals And is currently generating about 0.02 per unit of risk. If you would invest 1,239 in CI Financial Corp on August 31, 2024 and sell it today you would earn a total of 1,862 from holding CI Financial Corp or generate 150.28% 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. Precious Metals And
Performance |
| Timeline |
| CI Financial Corp |
| Precious Metals And |
CI Financial and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Precious Metals
The main advantage of trading using opposite CI Financial and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.| CI Financial vs. IGM Financial | CI Financial vs. iA Financial | CI Financial vs. Canadian Western Bank | CI Financial vs. Great West Lifeco |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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