Correlation Between Brompton European and CI Global
Can any of the company-specific risk be diversified away by investing in both Brompton European 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 Brompton European and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton European Dividend and CI Global Financial, you can compare the effects of market volatilities on Brompton European 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 Brompton European with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton European and CI Global.
Diversification Opportunities for Brompton European and CI Global
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brompton and FSF is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brompton European Dividend 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 Brompton European 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 Brompton European Dividend 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 Brompton European i.e., Brompton European and CI Global go up and down completely randomly.
Pair Corralation between Brompton European and CI Global
Assuming the 90 days trading horizon Brompton European is expected to generate 1.57 times less return on investment than CI Global. But when comparing it to its historical volatility, Brompton European Dividend is 1.02 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 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,097 in CI Global Financial on August 28, 2024 and sell it today you would earn a total of 956.00 from holding CI Global Financial or generate 45.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton European Dividend vs. CI Global Financial
Performance |
| Timeline |
| Brompton European |
| CI Global Financial |
Brompton European and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton European and CI Global
The main advantage of trading using opposite Brompton European and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton European 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.| Brompton European vs. Global Atomic Corp | Brompton European vs. enCore Energy Corp | Brompton European vs. Fission Uranium Corp | Brompton European vs. NexGen Energy |
| CI Global vs. Brompton Global Dividend | CI Global vs. Tech Leaders Income | CI Global vs. Global Healthcare Income | CI Global vs. Brompton European Dividend |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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