Correlation Between Mawer Global and CI Global

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

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

Diversification Opportunities for Mawer Global and CI Global

-0.31

Correlation Coefficient

Mawer Global  CI Global

Very good diversification

The 3 months correlation between Mawer and CIG18006 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mawer Global Small and CI Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Alpha and Mawer 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 Mawer Global Small are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Alpha has no effect on the direction of Mawer Global i.e., Mawer Global and CI Global go up and down completely randomly.

Pair Corralation between Mawer Global and CI Global

Assuming the 90 days trading horizon Mawer Global Small is expected to generate 0.43 times more return on investment than CI Global. However, Mawer Global Small is 2.31 times less risky than CI Global. It trades about 0.1 of its potential returns per unit of risk. CI Global Alpha is currently generating about -0.09 per unit of risk. If you would invest  1,543  in Mawer Global Small on December 26, 2024 and sell it today you would earn a total of  77.00  from holding Mawer Global Small or generate 4.99% return on investment over 90 days.

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

Mawer Global Small  vs.  CI Global Alpha

Mawer Global Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mawer Global Small are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Mawer Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Mawer Global and CI Global

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

The idea behind Mawer Global Small and CI Global Alpha 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.