Correlation Between Dynamic Active and CI Global
Can any of the company-specific risk be diversified away by investing in both Dynamic Active and CI Global 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 Dynamic Active and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Active Preferred and CI Global Financial, you can compare the effects of market volatilities on Dynamic Active and CI Global 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 Dynamic Active with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Active and CI Global.
Diversification Opportunities for Dynamic Active and CI Global
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dynamic and FSF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Active Preferred and CI Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Financial and Dynamic Active 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 Dynamic Active Preferred are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Financial has no effect on the direction of Dynamic Active i.e., Dynamic Active and CI Global go up and down completely randomly.
Pair Corralation between Dynamic Active and CI Global
Assuming the 90 days trading horizon Dynamic Active is expected to generate 10.85 times less return on investment than CI Global. But when comparing it to its historical volatility, Dynamic Active Preferred is 2.17 times less risky than CI Global. It trades about 0.06 of its potential returns per unit of risk. CI Global Financial is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,787 in CI Global Financial on August 29, 2024 and sell it today you would earn a total of 281.00 from holding CI Global Financial or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Dynamic Active Preferred vs. CI Global Financial
Performance |
| Timeline |
| Dynamic Active Preferred |
| CI Global Financial |
Dynamic Active and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Active and CI Global
The main advantage of trading using opposite Dynamic Active and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Active position performs unexpectedly, CI Global 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 CI Global will offset losses from the drop in CI Global's long position.| Dynamic Active vs. Dynamic Active Global | Dynamic Active vs. Dynamic Active Dividend | Dynamic Active vs. Dynamic Active Canadian | Dynamic Active vs. Global X Active |
| CI Global vs. CI Preferred Share | CI Global vs. First Asset Morningstar | CI Global vs. CI Short Term | CI Global vs. CI Investment Grade |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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