Correlation Between CI Canada and Harvest Healthcare
Can any of the company-specific risk be diversified away by investing in both CI Canada and Harvest Healthcare 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 Harvest Healthcare 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 Harvest Healthcare Leaders, you can compare the effects of market volatilities on CI Canada and Harvest Healthcare 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 Harvest Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and Harvest Healthcare.
Diversification Opportunities for CI Canada and Harvest Healthcare
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FLI and Harvest is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and Harvest Healthcare Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Healthcare 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 Harvest Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Healthcare has no effect on the direction of CI Canada i.e., CI Canada and Harvest Healthcare go up and down completely randomly.
Pair Corralation between CI Canada and Harvest Healthcare
Assuming the 90 days trading horizon CI Canada Lifeco is expected to under-perform the Harvest Healthcare. In addition to that, CI Canada is 1.09 times more volatile than Harvest Healthcare Leaders. It trades about -0.07 of its total potential returns per unit of risk. Harvest Healthcare Leaders is currently generating about -0.03 per unit of volatility. If you would invest 936.00 in Harvest Healthcare Leaders on September 12, 2024 and sell it today you would lose (5.00) from holding Harvest Healthcare Leaders or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canada Lifeco vs. Harvest Healthcare Leaders
Performance |
| Timeline |
| CI Canada Lifeco |
| Harvest Healthcare |
CI Canada and Harvest Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and Harvest Healthcare
The main advantage of trading using opposite CI Canada and Harvest Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, Harvest Healthcare 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 Harvest Healthcare will offset losses from the drop in Harvest Healthcare'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 |
| Harvest Healthcare vs. Harvest Premium Yield | Harvest Healthcare vs. Harvest Balanced Income | Harvest Healthcare vs. Harvest Energy Leaders | Harvest Healthcare vs. Harvest Eli Lilly |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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