Correlation Between TD Comfort and CI Global

Can any of the company-specific risk be diversified away by investing in both TD Comfort 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 TD Comfort and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TD Comfort Balanced and CI Global Unconstrained, you can compare the effects of market volatilities on TD Comfort 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 TD Comfort with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Comfort and CI Global.

Diversification Opportunities for TD Comfort and CI Global

0.18

Correlation Coefficient

TD Comfort  CI Global

Average diversification

The 3 months correlation between 0P0001FAU8 and CUBD is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TD Comfort Balanced and CI Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Unconstrained and TD Comfort 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 TD Comfort Balanced 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 Unconstrained has no effect on the direction of TD Comfort i.e., TD Comfort and CI Global go up and down completely randomly.

Pair Corralation between TD Comfort and CI Global

Assuming the 90 days trading horizon TD Comfort Balanced is expected to generate 1.04 times more return on investment than CI Global. However, TD Comfort is 1.04 times more volatile than CI Global Unconstrained. It trades about 0.41 of its potential returns per unit of risk. CI Global Unconstrained is currently generating about 0.28 per unit of risk. If you would invest  1,295  in TD Comfort Balanced on September 7, 2024 and sell it today you would earn a total of  37.00  from holding TD Comfort Balanced or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TD Comfort Balanced  vs.  CI Global Unconstrained

TD Comfort Balanced

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Comfort Balanced are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, TD Comfort is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

CI Global Unconstrained

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Unconstrained are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, CI Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TD Comfort and CI Global

The main advantage of trading using opposite TD Comfort and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Comfort 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.

The idea behind TD Comfort Balanced and CI Global Unconstrained pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.