Correlation Between Bloom Select and CI Black

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

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

Diversification Opportunities for Bloom Select and CI Black

0.62

Correlation Coefficient

Bloom Select  CI Black

Poor diversification

The 3 months correlation between Bloom and 0P0000752C is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Select Income and CI Black Creek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Black Creek and Bloom 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 Bloom Select Income are associated (or correlated) with CI Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Black Creek has no effect on the direction of Bloom Select i.e., Bloom Select and CI Black go up and down completely randomly.

Pair Corralation between Bloom Select and CI Black

Assuming the 90 days trading horizon Bloom Select Income is expected to generate 1.23 times more return on investment than CI Black. However, Bloom Select is 1.23 times more volatile than CI Black Creek. It trades about -0.04 of its potential returns per unit of risk. CI Black Creek is currently generating about -0.15 per unit of risk. If you would invest  826.00  in Bloom Select Income on October 11, 2024 and sell it today you would lose (32.00) from holding Bloom Select Income or give up 3.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Bloom Select Income  vs.  CI Black Creek

Bloom Select Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bloom Select Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental drivers, Bloom Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CI Black Creek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Black Creek 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 Bloom Select and CI Black

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

The idea behind Bloom Select Income and CI Black Creek 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..