Correlation Between CI Canadian and Global X
Can any of the company-specific risk be diversified away by investing in both CI Canadian and Global X 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 Global X 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 Global X SPTSX, you can compare the effects of market volatilities on CI Canadian and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and Global X.
Diversification Opportunities for CI Canadian and Global X
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RIT and Global is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian REIT and Global X SPTSX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SPTSX 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SPTSX has no effect on the direction of CI Canadian i.e., CI Canadian and Global X go up and down completely randomly.
Pair Corralation between CI Canadian and Global X
Assuming the 90 days trading horizon CI Canadian REIT is expected to generate 0.53 times more return on investment than Global X. However, CI Canadian REIT is 1.9 times less risky than Global X. It trades about 0.12 of its potential returns per unit of risk. Global X SPTSX is currently generating about 0.01 per unit of risk. If you would invest 1,480 in CI Canadian REIT on September 1, 2024 and sell it today you would earn a total of 192.00 from holding CI Canadian REIT or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
CI Canadian REIT vs. Global X SPTSX
Performance |
| Timeline |
| CI Canadian REIT |
| Global X SPTSX |
CI Canadian and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canadian and Global X
The main advantage of trading using opposite CI Canadian and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. CI Gold Giants | Global X vs. First Asset Tech | Global X vs. CI Canada Lifeco | Global X vs. Harvest Healthcare Leaders |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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