Correlation Between Edgepoint Cdn and CI Global

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

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

Diversification Opportunities for Edgepoint Cdn and CI Global

0.85

Correlation Coefficient

Edgepoint Cdn  CI Global

Very poor diversification

The 3 months correlation between Edgepoint and CIG18006 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Edgepoint Cdn Growth 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 Edgepoint Cdn 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 Edgepoint Cdn Growth 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 Edgepoint Cdn i.e., Edgepoint Cdn and CI Global go up and down completely randomly.

Pair Corralation between Edgepoint Cdn and CI Global

Assuming the 90 days trading horizon Edgepoint Cdn is expected to generate 7.84 times less return on investment than CI Global. But when comparing it to its historical volatility, Edgepoint Cdn Growth is 3.16 times less risky than CI Global. It trades about 0.09 of its potential returns per unit of risk. CI Global Alpha is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  8,969  in CI Global Alpha on September 25, 2024 and sell it today you would earn a total of  1,909  from holding CI Global Alpha or generate 21.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Edgepoint Cdn Growth  vs.  CI Global Alpha

Edgepoint Cdn Growth

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady forward-looking indicators, Edgepoint Cdn is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

CI Global Alpha

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CI Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Edgepoint Cdn and CI Global

The main advantage of trading using opposite Edgepoint Cdn and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgepoint Cdn 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 Edgepoint Cdn Growth 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.