Correlation Between CI Canadian and Vanguard Canadian
Can any of the company-specific risk be diversified away by investing in both CI Canadian and Vanguard Canadian 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 Vanguard Canadian 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 Vanguard Canadian Corporate, you can compare the effects of market volatilities on CI Canadian and Vanguard Canadian 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 Vanguard Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and Vanguard Canadian.
Diversification Opportunities for CI Canadian and Vanguard Canadian
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CXF and Vanguard is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Convertible and Vanguard Canadian Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Canadian 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 Vanguard Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Canadian has no effect on the direction of CI Canadian i.e., CI Canadian and Vanguard Canadian go up and down completely randomly.
Pair Corralation between CI Canadian and Vanguard Canadian
Assuming the 90 days trading horizon CI Canadian Convertible is expected to generate 4.19 times more return on investment than Vanguard Canadian. However, CI Canadian is 4.19 times more volatile than Vanguard Canadian Corporate. It trades about 0.05 of its potential returns per unit of risk. Vanguard Canadian Corporate is currently generating about 0.14 per unit of risk. If you would invest 1,005 in CI Canadian Convertible on August 29, 2024 and sell it today you would earn a total of 12.00 from holding CI Canadian Convertible or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canadian Convertible vs. Vanguard Canadian Corporate
Performance |
| Timeline |
| CI Canadian Convertible |
| Vanguard Canadian |
CI Canadian and Vanguard Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and Vanguard Canadian
The main advantage of trading using opposite CI Canadian and Vanguard Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, Vanguard Canadian 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 Vanguard Canadian will offset losses from the drop in Vanguard Canadian'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 |
| Vanguard Canadian vs. BMO Long Corporate | Vanguard Canadian vs. BMO Short Corporate | Vanguard Canadian vs. BMO High Yield | Vanguard Canadian vs. BMO Short Provincial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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