Correlation Between CI Financial and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both CI Financial and Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline Corp, you can compare the effects of market volatilities on CI Financial and Pembina Pipeline 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 Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Pembina Pipeline.
Diversification Opportunities for CI Financial and Pembina Pipeline
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIX and Pembina is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of CI Financial i.e., CI Financial and Pembina Pipeline go up and down completely randomly.
Pair Corralation between CI Financial and Pembina Pipeline
Assuming the 90 days trading horizon CI Financial is expected to generate 3.08 times less return on investment than Pembina Pipeline. But when comparing it to its historical volatility, CI Financial Corp is 2.54 times less risky than Pembina Pipeline. It trades about 0.31 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,210 in Pembina Pipeline Corp on October 24, 2024 and sell it today you would earn a total of 85.00 from holding Pembina Pipeline Corp or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Financial Corp vs. Pembina Pipeline Corp
Performance |
| Timeline |
| CI Financial Corp |
| Pembina Pipeline Corp |
CI Financial and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Pembina Pipeline
The main advantage of trading using opposite CI Financial and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| CI Financial vs. Clarke Inc | CI Financial vs. Guardian Capital Group | CI Financial vs. Accord Financial Corp | CI Financial vs. E L Financial Corp |
| Pembina Pipeline vs. Dream Industrial Real | Pembina Pipeline vs. Magna Mining | Pembina Pipeline vs. SalesforceCom CDR | Pembina Pipeline vs. Primaris Retail RE |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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