Correlation Between CI Canadian and Evolve Global

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

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

Diversification Opportunities for CI Canadian and Evolve Global

-0.45

Correlation Coefficient

CI Canadian  Evolve Global

Very good diversification

The 3 months correlation between CAGS and Evolve is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Short Term and Evolve Global Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Global Healthcare and CI Canadian 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 CI Canadian Short Term are associated (or correlated) with Evolve Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Global Healthcare has no effect on the direction of CI Canadian i.e., CI Canadian and Evolve Global go up and down completely randomly.

Pair Corralation between CI Canadian and Evolve Global

Assuming the 90 days trading horizon CI Canadian Short Term is expected to generate 0.22 times more return on investment than Evolve Global. However, CI Canadian Short Term is 4.58 times less risky than Evolve Global. It trades about 0.03 of its potential returns per unit of risk. Evolve Global Healthcare is currently generating about -0.31 per unit of risk. If you would invest  4,715  in CI Canadian Short Term on October 1, 2024 and sell it today you would earn a total of  13.00  from holding CI Canadian Short Term or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

CI Canadian Short Term  vs.  Evolve Global Healthcare

CI Canadian Short

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canadian Short Term are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Evolve Global Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolve Global Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with CI Canadian and Evolve Global

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

The idea behind CI Canadian Short Term and Evolve Global Healthcare 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.