Correlation Between Computer Modelling and CI Financial

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

By analyzing existing cross correlation between Computer Modelling Group and CI Financial Corp, you can compare the effects of market volatilities on Computer Modelling 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 Computer Modelling with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Modelling and CI Financial.

Diversification Opportunities for Computer Modelling and CI Financial

-0.5

Correlation Coefficient

Computer Modelling  CI Financial

Very good diversification

The 3 months correlation between Computer and CIX is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group 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 Computer Modelling 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 Computer Modelling Group 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 Computer Modelling i.e., Computer Modelling and CI Financial go up and down completely randomly.

Pair Corralation between Computer Modelling and CI Financial

Assuming the 90 days trading horizon Computer Modelling Group is expected to under-perform the CI Financial. But the stock apears to be less risky and, when comparing its historical volatility, Computer Modelling Group is 1.5 times less risky than CI Financial. The stock trades about -0.03 of its potential returns per unit of risk. The CI Financial Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,788  in CI Financial Corp on September 21, 2024 and sell it today you would earn a total of  1,304  from holding CI Financial Corp or generate 72.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Computer Modelling Group  vs.  CI Financial Corp

Computer Modelling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer Modelling Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Computer Modelling is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Financial Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Computer Modelling and CI Financial

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

The idea behind Computer Modelling Group and CI Financial Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.