Correlation Between CI Global and TD Monthly

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

Diversification Opportunities for CI Global and TD Monthly

0.01

Correlation Coefficient

CI Global  TD Monthly

Significant diversification

The 3 months correlation between 0P000070HA and 0P00016N5D is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and TD Monthly Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Monthly Income 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 TD Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Monthly Income has no effect on the direction of CI Global i.e., CI Global and TD Monthly go up and down completely randomly.

Pair Corralation between CI Global and TD Monthly

Assuming the 90 days trading horizon CI Global Alpha is expected to under-perform the TD Monthly. In addition to that, CI Global is 3.72 times more volatile than TD Monthly Income. It trades about -0.32 of its total potential returns per unit of risk. TD Monthly Income is currently generating about 0.03 per unit of volatility. If you would invest  1,408  in TD Monthly Income on December 4, 2024 and sell it today you would earn a total of  3.00  from holding TD Monthly Income or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

CI Global Alpha  vs.  TD Monthly Income

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 somewhat strong basic indicators, CI Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

TD Monthly Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days TD Monthly Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, TD Monthly 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 TD Monthly

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

The idea behind CI Global Alpha and TD Monthly Income 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.