Correlation Between Solution Financial and CI Financial
Can any of the company-specific risk be diversified away by investing in both Solution Financial and CI Financial 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 Solution Financial and CI Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Financial and CI Financial Corp, you can compare the effects of market volatilities on Solution Financial and CI Financial 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 Solution Financial with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Financial and CI Financial.
Diversification Opportunities for Solution Financial and CI Financial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solution and CIX is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Solution Financial and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Solution Financial 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 Solution Financial are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Solution Financial i.e., Solution Financial and CI Financial go up and down completely randomly.
Pair Corralation between Solution Financial and CI Financial
Assuming the 90 days trading horizon Solution Financial is expected to generate 5.83 times less return on investment than CI Financial. In addition to that, Solution Financial is 1.16 times more volatile than CI Financial Corp. It trades about 0.02 of its total potential returns per unit of risk. CI Financial Corp is currently generating about 0.16 per unit of volatility. If you would invest 1,180 in CI Financial Corp on September 20, 2024 and sell it today you would earn a total of 1,888 from holding CI Financial Corp or generate 160.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Financial vs. CI Financial Corp
Performance |
| Timeline |
| Solution Financial |
| CI Financial Corp |
Solution Financial and CI Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Financial and CI Financial
The main advantage of trading using opposite Solution Financial and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Financial position performs unexpectedly, CI Financial 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 Financial will offset losses from the drop in CI Financial's long position.| Solution Financial vs. Profound Medical Corp | Solution Financial vs. Constellation Software | Solution Financial vs. Converge Technology Solutions | Solution Financial vs. Diamond Estates Wines |
| CI Financial vs. IGM Financial | CI Financial vs. iA Financial | CI Financial vs. Canadian Western Bank | CI Financial vs. Great West Lifeco |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |