Correlation Between CI Canadian and Dynamic Active
Can any of the company-specific risk be diversified away by investing in both CI Canadian and Dynamic Active 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 Dynamic Active 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 Dynamic Active Crossover, you can compare the effects of market volatilities on CI Canadian and Dynamic Active 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 Dynamic Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and Dynamic Active.
Diversification Opportunities for CI Canadian and Dynamic Active
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CXF and Dynamic is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Convertible and Dynamic Active Crossover in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Active Crossover 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 Dynamic Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Active Crossover has no effect on the direction of CI Canadian i.e., CI Canadian and Dynamic Active go up and down completely randomly.
Pair Corralation between CI Canadian and Dynamic Active
Assuming the 90 days trading horizon CI Canadian is expected to generate 10.68 times less return on investment than Dynamic Active. In addition to that, CI Canadian is 4.53 times more volatile than Dynamic Active Crossover. It trades about 0.0 of its total potential returns per unit of risk. Dynamic Active Crossover is currently generating about 0.24 per unit of volatility. If you would invest 1,951 in Dynamic Active Crossover on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Dynamic Active Crossover or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CI Canadian Convertible vs. Dynamic Active Crossover
Performance |
| Timeline |
| CI Canadian Convertible |
| Dynamic Active Crossover |
CI Canadian and Dynamic Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and Dynamic Active
The main advantage of trading using opposite CI Canadian and Dynamic Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, Dynamic Active 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 Dynamic Active will offset losses from the drop in Dynamic Active's long position.| CI Canadian vs. iShares Core Canadian | CI Canadian vs. BMO Mid Corporate | CI Canadian vs. Global X Active | CI Canadian vs. iShares 1 10Yr Laddered |
| Dynamic Active vs. Dynamic Active Canadian | Dynamic Active vs. Dynamic Active Dividend | Dynamic Active vs. Dynamic Active Preferred | Dynamic Active vs. Dynamic Active Tactical |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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