Correlation Between Birchtech Corp and CI Financial

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

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

Diversification Opportunities for Birchtech Corp and CI Financial

-0.19

Correlation Coefficient

Birchtech Corp  CI Financial

Good diversification

The 3 months correlation between Birchtech and CIX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Birchtech Corp 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 Birchtech Corp are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and CI Financial go up and down completely randomly.

Pair Corralation between Birchtech Corp and CI Financial

Assuming the 90 days trading horizon Birchtech Corp is expected to generate 23.93 times more return on investment than CI Financial. However, Birchtech Corp is 23.93 times more volatile than CI Financial Corp. It trades about 0.03 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.15 per unit of risk. If you would invest  74.00  in Birchtech Corp on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Birchtech Corp or generate 1.35% return on investment over 90 days.

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

Birchtech Corp  vs.  CI Financial Corp

Birchtech Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Birchtech Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Birchtech Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CI Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Birchtech Corp and CI Financial

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

The idea behind Birchtech Corp and CI Financial Corp 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 Managers module to screen money managers from public funds and ETFs managed around the world.