Correlation Between First Asset and CI Gold
Can any of the company-specific risk be diversified away by investing in both First Asset and CI Gold 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 First Asset and CI Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Tech and CI Gold Giants, you can compare the effects of market volatilities on First Asset and CI Gold 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 First Asset with a short position of CI Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and CI Gold.
Diversification Opportunities for First Asset and CI Gold
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and CGXF is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Tech and CI Gold Giants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Giants and First Asset 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 First Asset Tech are associated (or correlated) with CI Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Giants has no effect on the direction of First Asset i.e., First Asset and CI Gold go up and down completely randomly.
Pair Corralation between First Asset and CI Gold
Assuming the 90 days trading horizon First Asset Tech is expected to generate 0.65 times more return on investment than CI Gold. However, First Asset Tech is 1.54 times less risky than CI Gold. It trades about -0.05 of its potential returns per unit of risk. CI Gold Giants is currently generating about -0.25 per unit of risk. If you would invest 2,199 in First Asset Tech on August 30, 2024 and sell it today you would lose (34.00) from holding First Asset Tech or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Asset Tech vs. CI Gold Giants
Performance |
| Timeline |
| First Asset Tech |
| CI Gold Giants |
First Asset and CI Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Asset and CI Gold
The main advantage of trading using opposite First Asset and CI Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset position performs unexpectedly, CI Gold 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 Gold will offset losses from the drop in CI Gold's long position.| First Asset vs. BMO Covered Call | First Asset vs. BMO Canadian High | First Asset vs. BMO Europe High | First Asset vs. Harvest Healthcare Leaders |
| CI Gold vs. First Asset Energy | CI Gold vs. First Asset Tech | CI Gold vs. Harvest Equal Weight | CI Gold vs. CI Canada 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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