Correlation Between CI Canada and Invesco SP
Can any of the company-specific risk be diversified away by investing in both CI Canada and Invesco SP 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 Invesco SP 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 Invesco SP 500, you can compare the effects of market volatilities on CI Canada and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and Invesco SP.
Diversification Opportunities for CI Canada and Invesco SP
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FLI and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of CI Canada i.e., CI Canada and Invesco SP go up and down completely randomly.
Pair Corralation between CI Canada and Invesco SP
Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 1.48 times more return on investment than Invesco SP. However, CI Canada is 1.48 times more volatile than Invesco SP 500. It trades about -0.07 of its potential returns per unit of risk. Invesco SP 500 is currently generating about -0.13 per unit of risk. If you would invest 1,165 in CI Canada Lifeco on September 12, 2024 and sell it today you would lose (15.00) from holding CI Canada Lifeco or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canada Lifeco vs. Invesco SP 500
Performance |
| Timeline |
| CI Canada Lifeco |
| Invesco SP 500 |
CI Canada and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and Invesco SP
The main advantage of trading using opposite CI Canada and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP'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 |
| Invesco SP vs. iShares SPTSX 60 | Invesco SP vs. iShares Core SP | Invesco SP vs. iShares Core SPTSX | Invesco SP vs. BMO Aggregate Bond |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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