Correlation Between CI Canada and BetaPro NASDAQ
Can any of the company-specific risk be diversified away by investing in both CI Canada and BetaPro NASDAQ 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 BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x, you can compare the effects of market volatilities on CI Canada and BetaPro NASDAQ 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 BetaPro NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and BetaPro NASDAQ.
Diversification Opportunities for CI Canada and BetaPro NASDAQ
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FLI and BetaPro is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and BetaPro NASDAQ 100 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro NASDAQ 100 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 BetaPro NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro NASDAQ 100 has no effect on the direction of CI Canada i.e., CI Canada and BetaPro NASDAQ go up and down completely randomly.
Pair Corralation between CI Canada and BetaPro NASDAQ
Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 0.43 times more return on investment than BetaPro NASDAQ. However, CI Canada Lifeco is 2.3 times less risky than BetaPro NASDAQ. It trades about 0.15 of its potential returns per unit of risk. BetaPro NASDAQ 100 2x is currently generating about -0.07 per unit of risk. If you would invest 994.00 in CI Canada Lifeco on September 1, 2024 and sell it today you would earn a total of 205.00 from holding CI Canada Lifeco or generate 20.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
CI Canada Lifeco vs. BetaPro NASDAQ 100 2x
Performance |
| Timeline |
| CI Canada Lifeco |
| BetaPro NASDAQ 100 |
CI Canada and BetaPro NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and BetaPro NASDAQ
The main advantage of trading using opposite CI Canada and BetaPro NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, BetaPro NASDAQ 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 BetaPro NASDAQ will offset losses from the drop in BetaPro NASDAQ'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 |
| BetaPro NASDAQ vs. BetaPro SPTSX Capped | BetaPro NASDAQ vs. Forstrong Global Income | BetaPro NASDAQ vs. BMO Aggregate Bond | BetaPro NASDAQ vs. iShares Canadian HYBrid |
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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