Correlation Between CI Canadian and BetaPro SP
Can any of the company-specific risk be diversified away by investing in both CI Canadian and BetaPro SP 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 BetaPro SP 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 BetaPro SP 500, you can compare the effects of market volatilities on CI Canadian and BetaPro SP 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 BetaPro SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and BetaPro SP.
Diversification Opportunities for CI Canadian and BetaPro SP
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RIT and BetaPro is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian REIT and BetaPro SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro SP 500 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 BetaPro SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro SP 500 has no effect on the direction of CI Canadian i.e., CI Canadian and BetaPro SP go up and down completely randomly.
Pair Corralation between CI Canadian and BetaPro SP
Assuming the 90 days trading horizon CI Canadian is expected to generate 40.5 times less return on investment than BetaPro SP. But when comparing it to its historical volatility, CI Canadian REIT is 2.21 times less risky than BetaPro SP. It trades about 0.02 of its potential returns per unit of risk. BetaPro SP 500 is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,434 in BetaPro SP 500 on September 1, 2024 and sell it today you would earn a total of 280.00 from holding BetaPro SP 500 or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CI Canadian REIT vs. BetaPro SP 500
Performance |
| Timeline |
| CI Canadian REIT |
| BetaPro SP 500 |
CI Canadian and BetaPro SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and BetaPro SP
The main advantage of trading using opposite CI Canadian and BetaPro SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, BetaPro SP 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 BetaPro SP will offset losses from the drop in BetaPro SP'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 |
| BetaPro SP vs. BetaPro SPTSX Capped | BetaPro SP vs. Forstrong Global Income | BetaPro SP vs. BMO Aggregate Bond | BetaPro SP vs. iShares Canadian HYBrid |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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