Correlation Between Brompton European and CI ONE
Can any of the company-specific risk be diversified away by investing in both Brompton European and CI ONE 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 ONE 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 ONE Global, you can compare the effects of market volatilities on Brompton European and CI ONE 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 ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton European and CI ONE.
Diversification Opportunities for Brompton European and CI ONE
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brompton and ONEQ is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Brompton European Dividend and CI ONE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI ONE Global 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 ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI ONE Global has no effect on the direction of Brompton European i.e., Brompton European and CI ONE go up and down completely randomly.
Pair Corralation between Brompton European and CI ONE
Assuming the 90 days trading horizon Brompton European Dividend is expected to under-perform the CI ONE. In addition to that, Brompton European is 1.98 times more volatile than CI ONE Global. It trades about 0.0 of its total potential returns per unit of risk. CI ONE Global is currently generating about 0.21 per unit of volatility. If you would invest 4,268 in CI ONE Global on September 3, 2024 and sell it today you would earn a total of 145.00 from holding CI ONE Global or generate 3.4% 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 ONE Global
Performance |
| Timeline |
| Brompton European |
| CI ONE Global |
Brompton European and CI ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton European and CI ONE
The main advantage of trading using opposite Brompton European and CI ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton European position performs unexpectedly, CI ONE 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 ONE will offset losses from the drop in CI ONE's long position.| Brompton European vs. Brompton Global Dividend | Brompton European vs. Global Healthcare Income | Brompton European vs. Tech Leaders Income | Brompton European vs. Brompton North American |
| CI ONE vs. CI MidCap Dividend | CI ONE vs. CI Yield Enhanced | CI ONE vs. CI Canadian Short Term | CI ONE vs. CI ONE North |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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