Correlation Between CI Canada and First Trust
Can any of the company-specific risk be diversified away by investing in both CI Canada and First Trust 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 Canada and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canada Lifeco and First Trust NYSE, you can compare the effects of market volatilities on CI Canada and First Trust 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 Canada with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and First Trust.
Diversification Opportunities for CI Canada and First Trust
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FLI and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and First Trust NYSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NYSE and CI Canada 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 Canada Lifeco are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust NYSE has no effect on the direction of CI Canada i.e., CI Canada and First Trust go up and down completely randomly.
Pair Corralation between CI Canada and First Trust
Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 0.93 times more return on investment than First Trust. However, CI Canada Lifeco is 1.08 times less risky than First Trust. It trades about 0.1 of its potential returns per unit of risk. First Trust NYSE is currently generating about 0.05 per unit of risk. If you would invest 839.00 in CI Canada Lifeco on September 4, 2024 and sell it today you would earn a total of 353.00 from holding CI Canada Lifeco or generate 42.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canada Lifeco vs. First Trust NYSE
Performance |
| Timeline |
| CI Canada Lifeco |
| First Trust NYSE |
CI Canada and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and First Trust
The main advantage of trading using opposite CI Canada and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| CI Canada vs. First Asset Energy | CI Canada vs. CI Gold Giants | CI Canada vs. Harvest Equal Weight | CI Canada vs. First Asset Tech |
| First Trust vs. First Asset Energy | First Trust vs. First Asset Tech | First Trust vs. Harvest Equal Weight | First Trust vs. CI Canada Lifeco |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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