Correlation Between CI Global and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both CI Global and Picton Mahoney 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 Global and Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Global Climate and Picton Mahoney Fortified, you can compare the effects of market volatilities on CI Global and Picton Mahoney 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 Global with a short position of Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and Picton Mahoney.
Diversification Opportunities for CI Global and Picton Mahoney
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CLML and Picton is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Climate and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified and CI Global 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 Global Climate are associated (or correlated) with Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of CI Global i.e., CI Global and Picton Mahoney go up and down completely randomly.
Pair Corralation between CI Global and Picton Mahoney
Assuming the 90 days trading horizon CI Global Climate is expected to generate 1.61 times more return on investment than Picton Mahoney. However, CI Global is 1.61 times more volatile than Picton Mahoney Fortified. It trades about 0.14 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.08 per unit of risk. If you would invest 1,758 in CI Global Climate on August 28, 2024 and sell it today you would earn a total of 1,668 from holding CI Global Climate or generate 94.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Global Climate vs. Picton Mahoney Fortified
Performance |
| Timeline |
| CI Global Climate |
| Picton Mahoney Fortified |
CI Global and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Global and Picton Mahoney
The main advantage of trading using opposite CI Global and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.| CI Global vs. Vanguard FTSE Canada | CI Global vs. Vanguard Canadian Aggregate | CI Global vs. Vanguard Total Market | CI Global vs. Vanguard FTSE Emerging |
| Picton Mahoney vs. Global X Active | Picton Mahoney vs. Global X Active | Picton Mahoney vs. Global X Active | Picton Mahoney vs. Global X Active |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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