Correlation Between CI Canadian and CI Canada
Can any of the company-specific risk be diversified away by investing in both CI Canadian and CI Canada 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 Canada 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 Canada Lifeco, you can compare the effects of market volatilities on CI Canadian and CI Canada 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 Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and CI Canada.
Diversification Opportunities for CI Canadian and CI Canada
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RIT and FLI is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian REIT and CI Canada Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canada Lifeco 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 Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canada Lifeco has no effect on the direction of CI Canadian i.e., CI Canadian and CI Canada go up and down completely randomly.
Pair Corralation between CI Canadian and CI Canada
Assuming the 90 days trading horizon CI Canadian is expected to generate 2.16 times less return on investment than CI Canada. But when comparing it to its historical volatility, CI Canadian REIT is 1.26 times less risky than CI Canada. It trades about 0.05 of its potential returns per unit of risk. CI Canada Lifeco is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 976.00 in CI Canada Lifeco on November 28, 2024 and sell it today you would earn a total of 181.00 from holding CI Canada Lifeco or generate 18.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canadian REIT vs. CI Canada Lifeco
Performance |
| Timeline |
| CI Canadian REIT |
| CI Canada Lifeco |
CI Canadian and CI Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and CI Canada
The main advantage of trading using opposite CI Canadian and CI Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, CI Canada 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 Canada will offset losses from the drop in CI Canada's long position.| CI Canadian vs. BMO Equal Weight | CI Canadian vs. Vanguard FTSE Canadian | CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. BMO Equal Weight |
| CI Canada vs. First Asset Energy | CI Canada vs. CI Gold Giants | CI Canada vs. Harvest Equal Weight | CI Canada vs. First Asset Tech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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