Correlation Between CI Global and CDSPI Global

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

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

Diversification Opportunities for CI Global and CDSPI Global

0.85

Correlation Coefficient

CI Global  CDSPI Global

Very poor diversification

The 3 months correlation between 0P000070HA and CDSPI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and CDSPI Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI Global Growth 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 Alpha are associated (or correlated) with CDSPI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI Global Growth has no effect on the direction of CI Global i.e., CI Global and CDSPI Global go up and down completely randomly.

Pair Corralation between CI Global and CDSPI Global

Assuming the 90 days trading horizon CI Global Alpha is expected to under-perform the CDSPI Global. In addition to that, CI Global is 2.08 times more volatile than CDSPI Global Growth. It trades about -0.08 of its total potential returns per unit of risk. CDSPI Global Growth is currently generating about 0.0 per unit of volatility. If you would invest  6,002  in CDSPI Global Growth on December 28, 2024 and sell it today you would lose (16.00) from holding CDSPI Global Growth or give up 0.27% of portfolio value over 90 days.

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

CI Global Alpha  vs.  CDSPI Global Growth

CI Global Alpha

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Global Alpha has generated negative risk-adjusted returns adding no value to fund investors. Despite latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

CDSPI Global Growth

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CI Global and CDSPI Global

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

The idea behind CI Global Alpha and CDSPI Global Growth 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.