Correlation Between CI Investment and CI Preferred
Can any of the company-specific risk be diversified away by investing in both CI Investment and CI Preferred 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 Investment and CI Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Investment Grade and CI Preferred Share, you can compare the effects of market volatilities on CI Investment and CI Preferred 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 Investment with a short position of CI Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Investment and CI Preferred.
Diversification Opportunities for CI Investment and CI Preferred
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIG and FPR is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CI Investment Grade and CI Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Preferred Share and CI Investment 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 Investment Grade are associated (or correlated) with CI Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Preferred Share has no effect on the direction of CI Investment i.e., CI Investment and CI Preferred go up and down completely randomly.
Pair Corralation between CI Investment and CI Preferred
Assuming the 90 days trading horizon CI Investment is expected to generate 2.37 times less return on investment than CI Preferred. But when comparing it to its historical volatility, CI Investment Grade is 1.38 times less risky than CI Preferred. It trades about 0.09 of its potential returns per unit of risk. CI Preferred Share is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,891 in CI Preferred Share on August 25, 2024 and sell it today you would earn a total of 353.00 from holding CI Preferred Share or generate 18.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Investment Grade vs. CI Preferred Share
Performance |
| Timeline |
| CI Investment Grade |
| CI Preferred Share |
CI Investment and CI Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Investment and CI Preferred
The main advantage of trading using opposite CI Investment and CI Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Investment position performs unexpectedly, CI Preferred 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 Preferred will offset losses from the drop in CI Preferred's long position.| CI Investment vs. CI Enhanced Short | CI Investment vs. Global X Active | CI Investment vs. Mackenzie Unconstrained Bond | CI Investment vs. CI Enhanced Government |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |