Correlation Between CI Canadian and IShares Convertible
Can any of the company-specific risk be diversified away by investing in both CI Canadian and IShares Convertible 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 Convertible 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 Convertible Bond, you can compare the effects of market volatilities on CI Canadian and IShares Convertible 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 Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and IShares Convertible.
Diversification Opportunities for CI Canadian and IShares Convertible
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CXF and IShares is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Convertible and iShares Convertible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Convertible Bond 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 Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Convertible Bond has no effect on the direction of CI Canadian i.e., CI Canadian and IShares Convertible go up and down completely randomly.
Pair Corralation between CI Canadian and IShares Convertible
Assuming the 90 days trading horizon CI Canadian Convertible is expected to under-perform the IShares Convertible. In addition to that, CI Canadian is 2.12 times more volatile than iShares Convertible Bond. It trades about -0.05 of its total potential returns per unit of risk. iShares Convertible Bond is currently generating about 0.11 per unit of volatility. If you would invest 1,728 in iShares Convertible Bond on November 3, 2024 and sell it today you would earn a total of 20.00 from holding iShares Convertible Bond or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canadian Convertible vs. iShares Convertible Bond
Performance |
| Timeline |
| CI Canadian Convertible |
| iShares Convertible Bond |
CI Canadian and IShares Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and IShares Convertible
The main advantage of trading using opposite CI Canadian and IShares Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, IShares Convertible 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 Convertible will offset losses from the drop in IShares Convertible'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 Convertible vs. iShares 1 10Yr Laddered | IShares Convertible vs. CI Canadian Convertible | IShares Convertible vs. iShares Floating Rate | IShares Convertible 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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