Correlation Between CI MidCap and CI ONE
Can any of the company-specific risk be diversified away by investing in both CI MidCap and CI ONE 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 MidCap and CI ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI MidCap Dividend and CI ONE North, you can compare the effects of market volatilities on CI MidCap and CI ONE 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 MidCap with a short position of CI ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI MidCap and CI ONE.
Diversification Opportunities for CI MidCap and CI ONE
Modest diversification
The 3 months correlation between UMI and ONEB is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CI MidCap Dividend and CI ONE North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI ONE North and CI MidCap 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 MidCap Dividend are associated (or correlated) with CI ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI ONE North has no effect on the direction of CI MidCap i.e., CI MidCap and CI ONE go up and down completely randomly.
Pair Corralation between CI MidCap and CI ONE
Assuming the 90 days trading horizon CI MidCap Dividend is expected to under-perform the CI ONE. In addition to that, CI MidCap is 2.87 times more volatile than CI ONE North. It trades about -0.05 of its total potential returns per unit of risk. CI ONE North is currently generating about 0.16 per unit of volatility. If you would invest 4,933 in CI ONE North on September 13, 2024 and sell it today you would earn a total of 42.00 from holding CI ONE North or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI MidCap Dividend vs. CI ONE North
Performance |
| Timeline |
| CI MidCap Dividend |
| CI ONE North |
CI MidCap and CI ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI MidCap and CI ONE
The main advantage of trading using opposite CI MidCap and CI ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI MidCap position performs unexpectedly, CI ONE 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 ONE will offset losses from the drop in CI ONE's long position.| CI MidCap vs. iShares Small Cap | CI MidCap vs. iShares SP Mid Cap | CI MidCap vs. iShares Core SP | CI MidCap vs. iShares MSCI Europe |
| CI ONE vs. CI ONE Global | CI ONE vs. CI Yield Enhanced | CI ONE vs. CI MidCap Dividend | CI ONE vs. CI Canadian Short Term |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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