Correlation Between Vanguard FTSE and CI Canada
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and CI Canada 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 Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Canadian and CI Canada Quality, you can compare the effects of market volatilities on Vanguard FTSE and CI Canada 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 Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and CI Canada.
Diversification Opportunities for Vanguard FTSE and CI Canada
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and DGRC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Canadian and CI Canada Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canada Quality 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 Canadian are associated (or correlated) with CI Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canada Quality has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and CI Canada go up and down completely randomly.
Pair Corralation between Vanguard FTSE and CI Canada
Assuming the 90 days trading horizon Vanguard FTSE is expected to generate 3.63 times less return on investment than CI Canada. In addition to that, Vanguard FTSE is 1.2 times more volatile than CI Canada Quality. It trades about 0.02 of its total potential returns per unit of risk. CI Canada Quality is currently generating about 0.1 per unit of volatility. If you would invest 3,896 in CI Canada Quality on November 5, 2024 and sell it today you would earn a total of 52.00 from holding CI Canada Quality or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Canadian vs. CI Canada Quality
Performance |
| Timeline |
| Vanguard FTSE Canadian |
| CI Canada Quality |
Vanguard FTSE and CI Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and CI Canada
The main advantage of trading using opposite Vanguard FTSE and CI Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, CI Canada 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 Canada will offset losses from the drop in CI Canada's long position.| Vanguard FTSE vs. Vanguard FTSE Canadian | Vanguard FTSE vs. iShares SPTSX Composite | Vanguard FTSE vs. iShares SPTSX Capped | Vanguard FTSE vs. BMO Equal Weight |
| CI Canada vs. iShares Core MSCI | CI Canada vs. SPDR Portfolio Emerging | CI Canada vs. SPDR Portfolio SP | CI Canada vs. iShares Canadian Short |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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