Correlation Between CI Global and Fidelity ClearPath

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

By analyzing existing cross correlation between CI Global Resource and Fidelity ClearPath 2045, you can compare the effects of market volatilities on CI Global and Fidelity ClearPath 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 Fidelity ClearPath. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and Fidelity ClearPath.

Diversification Opportunities for CI Global and Fidelity ClearPath

0.24

Correlation Coefficient

CI Global  Fidelity ClearPath

Modest diversification

The 3 months correlation between 0P000070I2 and Fidelity is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Resource and Fidelity ClearPath 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity ClearPath 2045 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 Resource are associated (or correlated) with Fidelity ClearPath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity ClearPath 2045 has no effect on the direction of CI Global i.e., CI Global and Fidelity ClearPath go up and down completely randomly.

Pair Corralation between CI Global and Fidelity ClearPath

Assuming the 90 days trading horizon CI Global Resource is expected to under-perform the Fidelity ClearPath. In addition to that, CI Global is 1.05 times more volatile than Fidelity ClearPath 2045. It trades about -0.09 of its total potential returns per unit of risk. Fidelity ClearPath 2045 is currently generating about -0.07 per unit of volatility. If you would invest  2,820  in Fidelity ClearPath 2045 on December 1, 2024 and sell it today you would lose (134.00) from holding Fidelity ClearPath 2045 or give up 4.75% of portfolio value over 90 days.

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

CI Global Resource  vs.  Fidelity ClearPath 2045

CI Global Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Global Resource 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.

Fidelity ClearPath 2045

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity ClearPath 2045 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Fidelity ClearPath is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CI Global and Fidelity ClearPath

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

The idea behind CI Global Resource and Fidelity ClearPath 2045 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.