Correlation Between CI Canadian and First Asset
Can any of the company-specific risk be diversified away by investing in both CI Canadian and First Asset 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 First Asset 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 First Asset Morningstar, you can compare the effects of market volatilities on CI Canadian and First Asset 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 First Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and First Asset.
Diversification Opportunities for CI Canadian and First Asset
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CXF and First is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Convertible and First Asset Morningstar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Asset Morningstar 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 First Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Asset Morningstar has no effect on the direction of CI Canadian i.e., CI Canadian and First Asset go up and down completely randomly.
Pair Corralation between CI Canadian and First Asset
Assuming the 90 days trading horizon CI Canadian is expected to generate 3.16 times less return on investment than First Asset. In addition to that, CI Canadian is 1.03 times more volatile than First Asset Morningstar. It trades about 0.06 of its total potential returns per unit of risk. First Asset Morningstar is currently generating about 0.18 per unit of volatility. If you would invest 2,632 in First Asset Morningstar on September 3, 2024 and sell it today you would earn a total of 644.00 from holding First Asset Morningstar or generate 24.47% 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. First Asset Morningstar
Performance |
| Timeline |
| CI Canadian Convertible |
| First Asset Morningstar |
CI Canadian and First Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and First Asset
The main advantage of trading using opposite CI Canadian and First Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, First Asset 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 First Asset will offset losses from the drop in First Asset'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 |
| First Asset vs. Mackenzie Large Cap | First Asset vs. Goldman Sachs ActiveBeta | First Asset vs. BMO MSCI EAFE | First Asset vs. BMO Long Federal |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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