Correlation Between CI Canadian and Hamilton Canadian

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

By analyzing existing cross correlation between CI Canadian Banks and Hamilton Canadian Bank, you can compare the effects of market volatilities on CI Canadian and Hamilton Canadian 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 Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and Hamilton Canadian.

Diversification Opportunities for CI Canadian and Hamilton Canadian

0.71

Correlation Coefficient

CI Canadian  Hamilton Canadian

Poor diversification

The 3 months correlation between CIC and Hamilton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Banks and Hamilton Canadian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian Bank 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 Banks are associated (or correlated) with Hamilton Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Canadian Bank has no effect on the direction of CI Canadian i.e., CI Canadian and Hamilton Canadian go up and down completely randomly.

Pair Corralation between CI Canadian and Hamilton Canadian

Assuming the 90 days trading horizon CI Canadian Banks is expected to under-perform the Hamilton Canadian. But the etf apears to be less risky and, when comparing its historical volatility, CI Canadian Banks is 1.22 times less risky than Hamilton Canadian. The etf trades about -0.08 of its potential returns per unit of risk. The Hamilton Canadian Bank is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,287  in Hamilton Canadian Bank on December 30, 2024 and sell it today you would earn a total of  37.00  from holding Hamilton Canadian Bank or generate 1.62% return on investment over 90 days.

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

CI Canadian Banks  vs.  Hamilton Canadian Bank

CI Canadian Banks

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Canadian Banks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, CI Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Hamilton Canadian Bank

Risk-Adjusted Performance

Weak

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

Pair Trading with CI Canadian and Hamilton Canadian

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

The idea behind CI Canadian Banks and Hamilton Canadian Bank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.