Correlation Between CI Canadian and CI Global
Can any of the company-specific risk be diversified away by investing in both CI Canadian and CI Global 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 Canadian and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canadian REIT and CI Global REIT, you can compare the effects of market volatilities on CI Canadian and CI Global 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 Canadian with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and CI Global.
Diversification Opportunities for CI Canadian and CI Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RIT and CGRE is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian REIT and CI Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global REIT and CI Canadian 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 Canadian REIT are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global REIT has no effect on the direction of CI Canadian i.e., CI Canadian and CI Global go up and down completely randomly.
Pair Corralation between CI Canadian and CI Global
Assuming the 90 days trading horizon CI Canadian REIT is expected to under-perform the CI Global. In addition to that, CI Canadian is 1.21 times more volatile than CI Global REIT. It trades about -0.15 of its total potential returns per unit of risk. CI Global REIT is currently generating about -0.16 per unit of volatility. If you would invest 2,246 in CI Global REIT on August 28, 2024 and sell it today you would lose (43.00) from holding CI Global REIT or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canadian REIT vs. CI Global REIT
Performance |
| Timeline |
| CI Canadian REIT |
| CI Global REIT |
CI Canadian and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and CI Global
The main advantage of trading using opposite CI Canadian and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, CI Global 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 Global will offset losses from the drop in CI Global's long position.| CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. iShares Canadian Select | CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. iShares Diversified Monthly |
| CI Global vs. iShares SPTSX Capped | CI Global vs. iShares Canadian Select | CI Global vs. iShares SPTSX Capped | CI Global vs. iShares Diversified Monthly |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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