Correlation Between IShares Diversified and CI Global
Can any of the company-specific risk be diversified away by investing in both IShares Diversified 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 IShares Diversified and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Diversified Monthly and CI Global REIT, you can compare the effects of market volatilities on IShares Diversified 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 IShares Diversified with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Diversified and CI Global.
Diversification Opportunities for IShares Diversified and CI Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and CGRE is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding iShares Diversified Monthly and CI Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global REIT and IShares Diversified 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 iShares Diversified Monthly 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 REIT has no effect on the direction of IShares Diversified i.e., IShares Diversified and CI Global go up and down completely randomly.
Pair Corralation between IShares Diversified and CI Global
Assuming the 90 days trading horizon iShares Diversified Monthly is expected to generate 0.42 times more return on investment than CI Global. However, iShares Diversified Monthly is 2.38 times less risky than CI Global. It trades about 0.36 of its potential returns per unit of risk. CI Global REIT is currently generating about 0.04 per unit of risk. If you would invest 1,121 in iShares Diversified Monthly on August 31, 2024 and sell it today you would earn a total of 24.00 from holding iShares Diversified Monthly or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Diversified Monthly vs. CI Global REIT
Performance |
| Timeline |
| iShares Diversified |
| CI Global REIT |
IShares Diversified and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Diversified and CI Global
The main advantage of trading using opposite IShares Diversified and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Diversified 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.| IShares Diversified vs. iShares SPTSX Capped | IShares Diversified vs. iShares Canadian Select | IShares Diversified vs. iShares SPTSX Completion | IShares Diversified vs. iShares Canadian Real |
| CI Global vs. CI Global Real | CI Global vs. CI Global Infrastructure | CI Global vs. CI Canadian REIT | CI Global vs. Global X Equal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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