Correlation Between CI Canadian and IShares 1
Can any of the company-specific risk be diversified away by investing in both CI Canadian and IShares 1 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 Canadian and IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canadian Convertible and iShares 1 10Yr Laddered, you can compare the effects of market volatilities on CI Canadian and IShares 1 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 Canadian with a short position of IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and IShares 1.
Diversification Opportunities for CI Canadian and IShares 1
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CXF and IShares is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Convertible and iShares 1 10Yr Laddered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 10Yr and CI Canadian 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 Canadian Convertible are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 10Yr has no effect on the direction of CI Canadian i.e., CI Canadian and IShares 1 go up and down completely randomly.
Pair Corralation between CI Canadian and IShares 1
Assuming the 90 days trading horizon CI Canadian Convertible is expected to generate 3.72 times more return on investment than IShares 1. However, CI Canadian is 3.72 times more volatile than iShares 1 10Yr Laddered. It trades about 0.09 of its potential returns per unit of risk. iShares 1 10Yr Laddered is currently generating about 0.18 per unit of risk. If you would invest 999.00 in CI Canadian Convertible on September 1, 2024 and sell it today you would earn a total of 21.00 from holding CI Canadian Convertible or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CI Canadian Convertible vs. iShares 1 10Yr Laddered
Performance |
| Timeline |
| CI Canadian Convertible |
| iShares 1 10Yr |
CI Canadian and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and IShares 1
The main advantage of trading using opposite CI Canadian and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, IShares 1 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 IShares 1 will offset losses from the drop in IShares 1's long position.| CI Canadian vs. Global X Active | CI Canadian vs. iShares Convertible Bond | CI Canadian vs. Invesco 1 5 Year | CI Canadian vs. Invesco Fundamental High |
| IShares 1 vs. iShares 1 10Yr Laddered | IShares 1 vs. iShares Floating Rate | IShares 1 vs. iShares Convertible Bond | IShares 1 vs. iShares JP Morgan |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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