Correlation Between CI Global and CDSPI Petite

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

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

Diversification Opportunities for CI Global and CDSPI Petite

0.16

Correlation Coefficient

CI Global  CDSPI Petite

Average diversification

The 3 months correlation between 0P000070H9 and CDSPI is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Health and CDSPI petite cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI petite cap and CI Global 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 Global Health are associated (or correlated) with CDSPI Petite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI petite cap has no effect on the direction of CI Global i.e., CI Global and CDSPI Petite go up and down completely randomly.

Pair Corralation between CI Global and CDSPI Petite

Assuming the 90 days trading horizon CI Global Health is expected to under-perform the CDSPI Petite. But the fund apears to be less risky and, when comparing its historical volatility, CI Global Health is 1.46 times less risky than CDSPI Petite. The fund trades about -0.04 of its potential returns per unit of risk. The CDSPI petite cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6,795  in CDSPI petite cap on October 26, 2024 and sell it today you would earn a total of  642.00  from holding CDSPI petite cap or generate 9.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

CI Global Health  vs.  CDSPI petite cap

CI Global Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Global Health has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, CI Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CDSPI petite cap

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CDSPI petite cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CDSPI Petite may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CI Global and CDSPI Petite

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

The idea behind CI Global Health and CDSPI petite cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.