Correlation Between CI ONE and CI Canadian

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

By analyzing existing cross correlation between CI ONE North and CI Canadian Short Term, you can compare the effects of market volatilities on CI ONE and CI Canadian 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 CI ONE with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI ONE and CI Canadian.

Diversification Opportunities for CI ONE and CI Canadian

0.91

Correlation Coefficient

CI ONE  CI Canadian

Almost no diversification

The 3 months correlation between ONEB and CAGS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CI ONE North and CI Canadian Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Short and CI ONE 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 CI ONE North are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Short has no effect on the direction of CI ONE i.e., CI ONE and CI Canadian go up and down completely randomly.

Pair Corralation between CI ONE and CI Canadian

Assuming the 90 days trading horizon CI ONE North is expected to generate 1.42 times more return on investment than CI Canadian. However, CI ONE is 1.42 times more volatile than CI Canadian Short Term. It trades about 0.06 of its potential returns per unit of risk. CI Canadian Short Term is currently generating about 0.08 per unit of risk. If you would invest  4,922  in CI ONE North on September 15, 2024 and sell it today you would earn a total of  45.00  from holding CI ONE North or generate 0.91% return on investment over 90 days.

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

CI ONE North  vs.  CI Canadian Short Term

CI ONE North

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI ONE North are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI ONE is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Canadian Short

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canadian Short Term are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CI ONE and CI Canadian

The main advantage of trading using opposite CI ONE and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI ONE position performs unexpectedly, CI Canadian 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 Canadian will offset losses from the drop in CI Canadian's long position.

The idea behind CI ONE North and CI Canadian Short Term 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.