Correlation Between CI Financial and Rocky Mountain
Can any of the company-specific risk be diversified away by investing in both CI Financial and Rocky Mountain 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 Rocky Mountain 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 Rocky Mountain Liquor, you can compare the effects of market volatilities on CI Financial and Rocky Mountain 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 Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Rocky Mountain.
Diversification Opportunities for CI Financial and Rocky Mountain
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIX and Rocky is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Rocky Mountain Liquor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Liquor 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 Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Liquor has no effect on the direction of CI Financial i.e., CI Financial and Rocky Mountain go up and down completely randomly.
Pair Corralation between CI Financial and Rocky Mountain
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.56 times more return on investment than Rocky Mountain. However, CI Financial Corp is 1.79 times less risky than Rocky Mountain. It trades about 0.23 of its potential returns per unit of risk. Rocky Mountain Liquor is currently generating about 0.01 per unit of risk. If you would invest 1,402 in CI Financial Corp on September 5, 2024 and sell it today you would earn a total of 1,696 from holding CI Financial Corp or generate 120.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Financial Corp vs. Rocky Mountain Liquor
Performance |
| Timeline |
| CI Financial Corp |
| Rocky Mountain Liquor |
CI Financial and Rocky Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Rocky Mountain
The main advantage of trading using opposite CI Financial and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain'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 |
| Rocky Mountain vs. CI Financial Corp | Rocky Mountain vs. Laurentian Bank | Rocky Mountain vs. AGF Management Limited | Rocky Mountain vs. InPlay Oil 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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