Correlation Between Wells Fargo and CI Financial
Can any of the company-specific risk be diversified away by investing in both Wells Fargo and CI Financial 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 Wells Fargo and CI Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wall Financial and CI Financial Corp, you can compare the effects of market volatilities on Wells Fargo and CI Financial 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 Wells Fargo with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and CI Financial.
Diversification Opportunities for Wells Fargo and CI Financial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wells and CIX is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wall Financial and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Wells Fargo 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 Wall Financial are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Wells Fargo i.e., Wells Fargo and CI Financial go up and down completely randomly.
Pair Corralation between Wells Fargo and CI Financial
Assuming the 90 days trading horizon Wells Fargo is expected to generate 1.73 times less return on investment than CI Financial. In addition to that, Wells Fargo is 1.07 times more volatile than CI Financial Corp. It trades about 0.06 of its total potential returns per unit of risk. CI Financial Corp is currently generating about 0.1 per unit of volatility. If you would invest 951.00 in CI Financial Corp on September 20, 2024 and sell it today you would earn a total of 2,117 from holding CI Financial Corp or generate 222.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wall Financial vs. CI Financial Corp
Performance |
| Timeline |
| Wall Financial |
| CI Financial Corp |
Wells Fargo and CI Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and CI Financial
The main advantage of trading using opposite Wells Fargo and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo position performs unexpectedly, CI Financial 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 Financial will offset losses from the drop in CI Financial's long position.| Wells Fargo vs. BSR Real Estate | Wells Fargo vs. European Residential Real | Wells Fargo vs. Minto Apartment Real | Wells Fargo vs. iShares Canadian HYBrid |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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