Correlation Between CI International and First Asset
Can any of the company-specific risk be diversified away by investing in both CI International and First Asset 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 International and First Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI International Quality and First Asset Morningstar, you can compare the effects of market volatilities on CI International and First Asset 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 International with a short position of First Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI International and First Asset.
Diversification Opportunities for CI International and First Asset
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IQD and First is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CI International Quality and First Asset Morningstar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Asset Morningstar and CI International 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 International Quality are associated (or correlated) with First Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Asset Morningstar has no effect on the direction of CI International i.e., CI International and First Asset go up and down completely randomly.
Pair Corralation between CI International and First Asset
Assuming the 90 days trading horizon CI International Quality is expected to generate 1.04 times more return on investment than First Asset. However, CI International is 1.04 times more volatile than First Asset Morningstar. It trades about 0.14 of its potential returns per unit of risk. First Asset Morningstar is currently generating about 0.1 per unit of risk. If you would invest 3,420 in CI International Quality on September 12, 2024 and sell it today you would earn a total of 68.00 from holding CI International Quality or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CI International Quality vs. First Asset Morningstar
Performance |
| Timeline |
| CI International Quality |
| First Asset Morningstar |
CI International and First Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI International and First Asset
The main advantage of trading using opposite CI International and First Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI International position performs unexpectedly, First Asset 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 Asset will offset losses from the drop in First Asset's long position.The idea behind CI International Quality and First Asset Morningstar pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| First Asset vs. iShares Core MSCI | First Asset vs. BMO MSCI EAFE | First Asset vs. Vanguard FTSE Developed | First Asset vs. iShares MSCI EAFE |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |