Correlation Between Vanguard Canadian and CI Munro
Can any of the company-specific risk be diversified away by investing in both Vanguard Canadian and CI Munro 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 Canadian and CI Munro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Canadian Government and CI Munro Alternative, you can compare the effects of market volatilities on Vanguard Canadian and CI Munro 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 Canadian with a short position of CI Munro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Canadian and CI Munro.
Diversification Opportunities for Vanguard Canadian and CI Munro
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and CMAG is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Canadian Government and CI Munro Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Munro Alternative and Vanguard 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 Vanguard Canadian Government are associated (or correlated) with CI Munro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Munro Alternative has no effect on the direction of Vanguard Canadian i.e., Vanguard Canadian and CI Munro go up and down completely randomly.
Pair Corralation between Vanguard Canadian and CI Munro
Assuming the 90 days trading horizon Vanguard Canadian is expected to generate 3.68 times less return on investment than CI Munro. But when comparing it to its historical volatility, Vanguard Canadian Government is 2.22 times less risky than CI Munro. It trades about 0.17 of its potential returns per unit of risk. CI Munro Alternative is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,523 in CI Munro Alternative on September 3, 2024 and sell it today you would earn a total of 222.00 from holding CI Munro Alternative or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Canadian Government vs. CI Munro Alternative
Performance |
| Timeline |
| Vanguard Canadian |
| CI Munro Alternative |
Vanguard Canadian and CI Munro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Canadian and CI Munro
The main advantage of trading using opposite Vanguard Canadian and CI Munro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Canadian position performs unexpectedly, CI Munro 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 Munro will offset losses from the drop in CI Munro's long position.| Vanguard Canadian vs. BMO Short Corporate | Vanguard Canadian vs. BMO High Yield | Vanguard Canadian vs. iShares Core Canadian | Vanguard Canadian vs. Harvest Global REIT |
| CI Munro vs. CI Marret Alternative | CI Munro vs. Dynamic Active Global | CI Munro vs. CI Enhanced Short | CI Munro vs. CI Enhanced Government |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Transaction History View history of all your transactions and understand their impact on performance |