Correlation Between CI Global and Tangerine Balanced

Can any of the company-specific risk be diversified away by investing in both CI Global and Tangerine Balanced 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 Tangerine Balanced 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 Tangerine Balanced Growth, you can compare the effects of market volatilities on CI Global and Tangerine Balanced 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 Tangerine Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and Tangerine Balanced.

Diversification Opportunities for CI Global and Tangerine Balanced

0.72

Correlation Coefficient

CI Global  Tangerine Balanced

Poor diversification

The 3 months correlation between 0P000070HA and Tangerine is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and Tangerine Balanced Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangerine Balanced 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 Tangerine Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangerine Balanced Growth has no effect on the direction of CI Global i.e., CI Global and Tangerine Balanced go up and down completely randomly.

Pair Corralation between CI Global and Tangerine Balanced

Assuming the 90 days trading horizon CI Global Alpha is expected to generate 2.62 times more return on investment than Tangerine Balanced. However, CI Global is 2.62 times more volatile than Tangerine Balanced Growth. It trades about 0.02 of its potential returns per unit of risk. Tangerine Balanced Growth is currently generating about -0.09 per unit of risk. If you would invest  10,976  in CI Global Alpha on October 21, 2024 and sell it today you would earn a total of  35.00  from holding CI Global Alpha or generate 0.32% return on investment over 90 days.

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

CI Global Alpha  vs.  Tangerine Balanced Growth

CI Global Alpha

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, CI Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Tangerine Balanced Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CI Global and Tangerine Balanced

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

The idea behind CI Global Alpha and Tangerine Balanced 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.