Correlation Between CI Preferred and First Trust
Can any of the company-specific risk be diversified away by investing in both CI Preferred and First Trust 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 Preferred and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Preferred Share and First Trust Senior, you can compare the effects of market volatilities on CI Preferred and First Trust 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 Preferred with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Preferred and First Trust.
Diversification Opportunities for CI Preferred and First Trust
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FPR and First is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CI Preferred Share and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior and CI Preferred 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 Preferred Share are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Senior has no effect on the direction of CI Preferred i.e., CI Preferred and First Trust go up and down completely randomly.
Pair Corralation between CI Preferred and First Trust
Assuming the 90 days trading horizon CI Preferred Share is expected to generate 1.73 times more return on investment than First Trust. However, CI Preferred is 1.73 times more volatile than First Trust Senior. It trades about 0.1 of its potential returns per unit of risk. First Trust Senior is currently generating about 0.04 per unit of risk. If you would invest 2,486 in CI Preferred Share on October 29, 2025 and sell it today you would earn a total of 79.00 from holding CI Preferred Share or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Preferred Share vs. First Trust Senior
Performance |
| Timeline |
| CI Preferred Share |
| First Trust Senior |
CI Preferred and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Preferred and First Trust
The main advantage of trading using opposite CI Preferred and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Preferred position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| CI Preferred vs. CI Canadian Convertible | CI Preferred vs. Global X Active | CI Preferred vs. Guardian Directed Equity | CI Preferred vs. iShares Edge MSCI |
| First Trust vs. Global X Active | First Trust vs. Hamilton Global Financials | First Trust vs. BMO MSCI USA | First Trust vs. Global X Marijuana |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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