Correlation Between CI ONE and CI Canadian
Can any of the company-specific risk be diversified away by investing in both CI ONE 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 CI ONE and CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI ONE North and CI Canadian Short Term, you can compare the effects of market volatilities on CI ONE 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 CI ONE with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI ONE and CI Canadian.
Diversification Opportunities for CI ONE and CI Canadian
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ONEB and CAGS is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CI ONE North and CI Canadian Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Short and CI ONE 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 ONE North 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 Short has no effect on the direction of CI ONE i.e., CI ONE and CI Canadian go up and down completely randomly.
Pair Corralation between CI ONE and CI Canadian
Assuming the 90 days trading horizon CI ONE North is expected to generate about the same return on investment as CI Canadian Short Term. However, CI ONE is 1.24 times more volatile than CI Canadian Short Term. It trades about 0.14 of its potential returns per unit of risk. CI Canadian Short Term is currently producing about 0.18 per unit of risk. If you would invest 4,322 in CI Canadian Short Term on September 12, 2024 and sell it today you would earn a total of 437.00 from holding CI Canadian Short Term or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI ONE North vs. CI Canadian Short Term
Performance |
| Timeline |
| CI ONE North |
| CI Canadian Short |
CI ONE and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI ONE and CI Canadian
The main advantage of trading using opposite CI ONE and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI ONE 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.| CI ONE vs. CI ONE Global | CI ONE vs. CI Yield Enhanced | CI ONE vs. CI MidCap Dividend | CI ONE vs. CI Canadian Short Term |
| CI Canadian vs. NBI High Yield | CI Canadian vs. NBI Unconstrained Fixed | CI Canadian vs. Mackenzie Developed ex North | CI Canadian vs. BMO Short Term 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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