Correlation Between Dynamic Active and CI MidCap
Can any of the company-specific risk be diversified away by investing in both Dynamic Active and CI MidCap 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 MidCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Active Mid Cap and CI MidCap Dividend, you can compare the effects of market volatilities on Dynamic Active and CI MidCap 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 MidCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Active and CI MidCap.
Diversification Opportunities for Dynamic Active and CI MidCap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dynamic and UMI is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Active Mid Cap and CI MidCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI MidCap Dividend 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 Mid Cap are associated (or correlated) with CI MidCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI MidCap Dividend has no effect on the direction of Dynamic Active i.e., Dynamic Active and CI MidCap go up and down completely randomly.
Pair Corralation between Dynamic Active and CI MidCap
Assuming the 90 days trading horizon Dynamic Active is expected to generate 1.08 times less return on investment than CI MidCap. In addition to that, Dynamic Active is 1.03 times more volatile than CI MidCap Dividend. It trades about 0.25 of its total potential returns per unit of risk. CI MidCap Dividend is currently generating about 0.27 per unit of volatility. If you would invest 3,434 in CI MidCap Dividend on August 30, 2024 and sell it today you would earn a total of 251.00 from holding CI MidCap Dividend or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynamic Active Mid Cap vs. CI MidCap Dividend
Performance |
| Timeline |
| Dynamic Active Mid |
| CI MidCap Dividend |
Dynamic Active and CI MidCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Active and CI MidCap
The main advantage of trading using opposite Dynamic Active and CI MidCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Active position performs unexpectedly, CI MidCap 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 MidCap will offset losses from the drop in CI MidCap's long position.| Dynamic Active vs. Dynamic Active Dividend | Dynamic Active vs. Dynamic Active Global | Dynamic Active vs. Dynamic Active Canadian | Dynamic Active vs. Dynamic Active Global |
| CI MidCap vs. iShares SPTSX Small | CI MidCap vs. iShares MSCI Europe | CI MidCap vs. BMO Aggregate Bond | CI MidCap vs. iShares Canadian HYBrid |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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