Correlation Between Vanguard FTSE and CI Global
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and CI Global 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 Vanguard FTSE and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Canada and CI Global Climate, you can compare the effects of market volatilities on Vanguard FTSE and CI Global 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 Vanguard FTSE with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and CI Global.
Diversification Opportunities for Vanguard FTSE and CI Global
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and CLML is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Canada and CI Global Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Climate and Vanguard FTSE 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 Vanguard FTSE Canada are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Climate has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and CI Global go up and down completely randomly.
Pair Corralation between Vanguard FTSE and CI Global
Assuming the 90 days trading horizon Vanguard FTSE is expected to generate 2.11 times less return on investment than CI Global. But when comparing it to its historical volatility, Vanguard FTSE Canada is 4.48 times less risky than CI Global. It trades about 0.21 of its potential returns per unit of risk. CI Global Climate is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,316 in CI Global Climate on November 3, 2024 and sell it today you would earn a total of 179.00 from holding CI Global Climate or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vanguard FTSE Canada vs. CI Global Climate
Performance |
| Timeline |
| Vanguard FTSE Canada |
| CI Global Climate |
Vanguard FTSE and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and CI Global
The main advantage of trading using opposite Vanguard FTSE and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, CI Global 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 Global will offset losses from the drop in CI Global's long position.| Vanguard FTSE vs. iShares Core MSCI | Vanguard FTSE vs. Vanguard Total Market | Vanguard FTSE vs. iShares Core SP | Vanguard FTSE vs. Vanguard Canadian Aggregate |
| CI Global vs. NBI High Yield | CI Global vs. NBI Unconstrained Fixed | CI Global vs. Mackenzie Developed ex North | CI Global vs. BMO Short Term Bond |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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