Correlation Between CI Select and Dynamic Global

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

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

Diversification Opportunities for CI Select and Dynamic Global

0.14

Correlation Coefficient

CI Select  Dynamic Global

Average diversification

The 3 months correlation between 0P000075PH and Dynamic is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CI Select Global and Dynamic Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Global Fixed and CI Select 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 Select Global are associated (or correlated) with Dynamic Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Global Fixed has no effect on the direction of CI Select i.e., CI Select and Dynamic Global go up and down completely randomly.

Pair Corralation between CI Select and Dynamic Global

Assuming the 90 days trading horizon CI Select is expected to generate 1.44 times less return on investment than Dynamic Global. In addition to that, CI Select is 7.27 times more volatile than Dynamic Global Fixed. It trades about 0.02 of its total potential returns per unit of risk. Dynamic Global Fixed is currently generating about 0.17 per unit of volatility. If you would invest  1,987  in Dynamic Global Fixed on December 27, 2024 and sell it today you would earn a total of  23.00  from holding Dynamic Global Fixed or generate 1.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

CI Select Global  vs.  Dynamic Global Fixed

CI Select Global

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CI Select Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, CI Select is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Dynamic Global Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Global Fixed are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Dynamic Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CI Select and Dynamic Global

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

The idea behind CI Select Global and Dynamic Global Fixed 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.