Correlation Between CI Global and PHN Multi

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

Diversification Opportunities for CI Global and PHN Multi

0.98

Correlation Coefficient

CI Global  PHN Multi

Almost no diversification

The 3 months correlation between 0P000070HA and PHN is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and PHN Multi Style All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHN Multi Style 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 PHN Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHN Multi Style has no effect on the direction of CI Global i.e., CI Global and PHN Multi go up and down completely randomly.

Pair Corralation between CI Global and PHN Multi

Assuming the 90 days trading horizon CI Global Alpha is expected to generate 1.83 times more return on investment than PHN Multi. However, CI Global is 1.83 times more volatile than PHN Multi Style All Cap. It trades about 0.27 of its potential returns per unit of risk. PHN Multi Style All Cap is currently generating about 0.25 per unit of risk. If you would invest  8,415  in CI Global Alpha on September 1, 2024 and sell it today you would earn a total of  1,984  from holding CI Global Alpha or generate 23.58% return on investment over 90 days.

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

CI Global Alpha  vs.  PHN Multi Style All Cap

CI Global Alpha

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 21 (%) 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.

PHN Multi Style

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PHN Multi Style All Cap are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unfluctuating basic indicators, PHN Multi may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with CI Global and PHN Multi

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

The idea behind CI Global Alpha and PHN Multi Style All 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.