Correlation Between CI Canada and Tech Leaders
Can any of the company-specific risk be diversified away by investing in both CI Canada and Tech Leaders 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 Tech Leaders 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 Tech Leaders Income, you can compare the effects of market volatilities on CI Canada and Tech Leaders 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 Tech Leaders. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and Tech Leaders.
Diversification Opportunities for CI Canada and Tech Leaders
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between FLI and Tech is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and Tech Leaders Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tech Leaders Income 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 Tech Leaders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tech Leaders Income has no effect on the direction of CI Canada i.e., CI Canada and Tech Leaders go up and down completely randomly.
Pair Corralation between CI Canada and Tech Leaders
Assuming the 90 days trading horizon CI Canada is expected to generate 2.33 times less return on investment than Tech Leaders. But when comparing it to its historical volatility, CI Canada Lifeco is 1.11 times less risky than Tech Leaders. It trades about 0.05 of its potential returns per unit of risk. Tech Leaders Income is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,465 in Tech Leaders Income on November 19, 2024 and sell it today you would earn a total of 1,111 from holding Tech Leaders Income or generate 75.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canada Lifeco vs. Tech Leaders Income
Performance |
| Timeline |
| CI Canada Lifeco |
| Tech Leaders Income |
CI Canada and Tech Leaders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and Tech Leaders
The main advantage of trading using opposite CI Canada and Tech Leaders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, Tech Leaders 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 Tech Leaders will offset losses from the drop in Tech Leaders' 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 |
| Tech Leaders vs. Global Healthcare Income | Tech Leaders vs. Harvest Tech Achievers | Tech Leaders vs. Brompton Global Dividend | Tech Leaders vs. Harvest Brand Leaders |
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 Stocks Directory module to find actively traded stocks across global markets.
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