Correlation Between CI Canada and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both CI Canada and Picton Mahoney 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 Picton Mahoney 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 Picton Mahoney Fortified, you can compare the effects of market volatilities on CI Canada and Picton Mahoney 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 Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and Picton Mahoney.
Diversification Opportunities for CI Canada and Picton Mahoney
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FLI and Picton is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified 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 Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of CI Canada i.e., CI Canada and Picton Mahoney go up and down completely randomly.
Pair Corralation between CI Canada and Picton Mahoney
Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 5.53 times more return on investment than Picton Mahoney. However, CI Canada is 5.53 times more volatile than Picton Mahoney Fortified. It trades about 0.29 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.1 per unit of risk. If you would invest 1,094 in CI Canada Lifeco on September 4, 2024 and sell it today you would earn a total of 98.00 from holding CI Canada Lifeco or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CI Canada Lifeco vs. Picton Mahoney Fortified
Performance |
| Timeline |
| CI Canada Lifeco |
| Picton Mahoney Fortified |
CI Canada and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and Picton Mahoney
The main advantage of trading using opposite CI Canada and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney'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 |
| Picton Mahoney vs. PIMCO Monthly Income | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Mackenzie Unconstrained Bond | Picton Mahoney vs. NBI Liquid Alternatives |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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