Correlation Between CI Financial and T2 Metals
Can any of the company-specific risk be diversified away by investing in both CI Financial and T2 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 T2 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 T2 Metals Corp, you can compare the effects of market volatilities on CI Financial and T2 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and T2 Metals.
Diversification Opportunities for CI Financial and T2 Metals
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIX and TWO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of CI Financial i.e., CI Financial and T2 Metals go up and down completely randomly.
Pair Corralation between CI Financial and T2 Metals
Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.36 times more return on investment than T2 Metals. However, CI Financial Corp is 2.76 times less risky than T2 Metals. It trades about 0.08 of its potential returns per unit of risk. T2 Metals Corp is currently generating about 0.02 per unit of risk. If you would invest 1,258 in CI Financial Corp on September 3, 2024 and sell it today you would earn a total of 1,847 from holding CI Financial Corp or generate 146.82% 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. T2 Metals Corp
Performance |
| Timeline |
| CI Financial Corp |
| T2 Metals Corp |
CI Financial and T2 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and T2 Metals
The main advantage of trading using opposite CI Financial and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, T2 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 T2 Metals will offset losses from the drop in T2 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 |
| T2 Metals vs. Algoma Steel Group | T2 Metals vs. Champion Iron | T2 Metals vs. International Zeolite Corp | T2 Metals vs. European Residential Real |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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