Correlation Between NBI Sustainable and CI Canadian
Can any of the company-specific risk be diversified away by investing in both NBI Sustainable and CI Canadian 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 NBI Sustainable and CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Sustainable Canadian and CI Canadian Convertible, you can compare the effects of market volatilities on NBI Sustainable and CI Canadian 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 NBI Sustainable with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Sustainable and CI Canadian.
Diversification Opportunities for NBI Sustainable and CI Canadian
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NBI and CXF is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NBI Sustainable Canadian and CI Canadian Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Convertible and NBI Sustainable 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 NBI Sustainable Canadian are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Convertible has no effect on the direction of NBI Sustainable i.e., NBI Sustainable and CI Canadian go up and down completely randomly.
Pair Corralation between NBI Sustainable and CI Canadian
Assuming the 90 days trading horizon NBI Sustainable Canadian is expected to generate 0.52 times more return on investment than CI Canadian. However, NBI Sustainable Canadian is 1.92 times less risky than CI Canadian. It trades about 0.11 of its potential returns per unit of risk. CI Canadian Convertible is currently generating about 0.05 per unit of risk. If you would invest 2,113 in NBI Sustainable Canadian on August 28, 2024 and sell it today you would earn a total of 107.00 from holding NBI Sustainable Canadian or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Sustainable Canadian vs. CI Canadian Convertible
Performance |
| Timeline |
| NBI Sustainable Canadian |
| CI Canadian Convertible |
NBI Sustainable and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Sustainable and CI Canadian
The main advantage of trading using opposite NBI Sustainable and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Sustainable position performs unexpectedly, CI Canadian 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 CI Canadian will offset losses from the drop in CI Canadian's long position.| NBI Sustainable vs. NBI High Yield | NBI Sustainable vs. NBI Unconstrained Fixed | NBI Sustainable vs. NBI Canadian Family | NBI Sustainable vs. NBI Global Real |
| CI Canadian vs. Franklin Global Aggregate | CI Canadian vs. Franklin Large Cap | CI Canadian vs. First Trust Senior | CI Canadian 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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