Correlation Between Altagas Cum and CI Investment

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

By analyzing existing cross correlation between Altagas Cum Red and CI Investment Grade, you can compare the effects of market volatilities on Altagas Cum and CI Investment 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 Altagas Cum with a short position of CI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and CI Investment.

Diversification Opportunities for Altagas Cum and CI Investment

0.28

Correlation Coefficient

Altagas Cum  CI Investment

Modest diversification

The 3 months correlation between Altagas and FIG is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and CI Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Investment Grade and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with CI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Investment Grade has no effect on the direction of Altagas Cum i.e., Altagas Cum and CI Investment go up and down completely randomly.

Pair Corralation between Altagas Cum and CI Investment

Assuming the 90 days trading horizon Altagas Cum Red is expected to generate 2.0 times more return on investment than CI Investment. However, Altagas Cum is 2.0 times more volatile than CI Investment Grade. It trades about 0.78 of its potential returns per unit of risk. CI Investment Grade is currently generating about 0.07 per unit of risk. If you would invest  1,985  in Altagas Cum Red on October 25, 2024 and sell it today you would earn a total of  200.00  from holding Altagas Cum Red or generate 10.08% return on investment over 90 days.

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

Altagas Cum Red  vs.  CI Investment Grade

Altagas Cum Red

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Altagas Cum sustained solid returns over the last few months and may actually be approaching a breakup point.

CI Investment Grade

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CI Investment Grade are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, CI Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Altagas Cum and CI Investment

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

The idea behind Altagas Cum Red and CI Investment Grade 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.