Correlation Between Forstrong Global and CI Canada
Can any of the company-specific risk be diversified away by investing in both Forstrong Global and CI Canada 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 Forstrong Global and CI Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and CI Canada Lifeco, you can compare the effects of market volatilities on Forstrong Global and CI Canada 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 Forstrong Global with a short position of CI Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and CI Canada.
Diversification Opportunities for Forstrong Global and CI Canada
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forstrong and FLI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and CI Canada Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canada Lifeco and Forstrong Global 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 Forstrong Global Income are associated (or correlated) with CI Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canada Lifeco has no effect on the direction of Forstrong Global i.e., Forstrong Global and CI Canada go up and down completely randomly.
Pair Corralation between Forstrong Global and CI Canada
Assuming the 90 days trading horizon Forstrong Global Income is expected to under-perform the CI Canada. But the etf apears to be less risky and, when comparing its historical volatility, Forstrong Global Income is 4.07 times less risky than CI Canada. The etf trades about -0.08 of its potential returns per unit of risk. The CI Canada Lifeco is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,116 in CI Canada Lifeco on August 30, 2024 and sell it today you would earn a total of 81.00 from holding CI Canada Lifeco or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Forstrong Global Income vs. CI Canada Lifeco
Performance |
| Timeline |
| Forstrong Global Income |
| CI Canada Lifeco |
Forstrong Global and CI Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and CI Canada
The main advantage of trading using opposite Forstrong Global and CI Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, CI Canada 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 Canada will offset losses from the drop in CI Canada's long position.| Forstrong Global vs. Forstrong Global Ex North | Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. Forstrong Emerging Markets | Forstrong Global vs. NBI High Yield |
| CI Canada vs. First Asset Energy | CI Canada vs. CI Gold Giants | CI Canada vs. Harvest Equal Weight | CI Canada vs. First Asset Tech |
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.
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