Correlation Between CI Short and CI Enhanced
Can any of the company-specific risk be diversified away by investing in both CI Short and CI Enhanced 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 Short and CI Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Short Term and CI Enhanced Short, you can compare the effects of market volatilities on CI Short and CI Enhanced 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 Short with a short position of CI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Short and CI Enhanced.
Diversification Opportunities for CI Short and CI Enhanced
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FGB and FSB is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CI Short Term and CI Enhanced Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Enhanced Short and CI Short 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 Short Term are associated (or correlated) with CI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Enhanced Short has no effect on the direction of CI Short i.e., CI Short and CI Enhanced go up and down completely randomly.
Pair Corralation between CI Short and CI Enhanced
Assuming the 90 days trading horizon CI Short Term is expected to under-perform the CI Enhanced. But the etf apears to be less risky and, when comparing its historical volatility, CI Short Term is 1.11 times less risky than CI Enhanced. The etf trades about -0.06 of its potential returns per unit of risk. The CI Enhanced Short is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 965.00 in CI Enhanced Short on August 29, 2024 and sell it today you would earn a total of 0.00 from holding CI Enhanced Short or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Short Term vs. CI Enhanced Short
Performance |
| Timeline |
| CI Short Term |
| CI Enhanced Short |
CI Short and CI Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Short and CI Enhanced
The main advantage of trading using opposite CI Short and CI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Short position performs unexpectedly, CI Enhanced 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 Enhanced will offset losses from the drop in CI Enhanced's long position.| CI Short vs. CI Enhanced Short | CI Short vs. CI Preferred Share | CI Short vs. CI Global Financial | CI Short vs. CI Investment Grade |
| CI Enhanced vs. CI Investment Grade | CI Enhanced vs. CI Enhanced Government | CI Enhanced vs. CI Preferred Share | CI Enhanced vs. CI Short Term |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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