Correlation Between Capital Group and CI Global

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

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

Diversification Opportunities for Capital Group and CI Global

0.78

Correlation Coefficient

Capital Group  CI Global

Poor diversification

The 3 months correlation between Capital and 0P000070I2 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Global and CI Global Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Resource and Capital Group 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 Capital Group Global are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Resource has no effect on the direction of Capital Group i.e., Capital Group and CI Global go up and down completely randomly.

Pair Corralation between Capital Group and CI Global

Assuming the 90 days trading horizon Capital Group Global is expected to generate 0.62 times more return on investment than CI Global. However, Capital Group Global is 1.61 times less risky than CI Global. It trades about 0.21 of its potential returns per unit of risk. CI Global Resource is currently generating about 0.12 per unit of risk. If you would invest  5,576  in Capital Group Global on September 4, 2024 and sell it today you would earn a total of  517.00  from holding Capital Group Global or generate 9.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Capital Group Global  vs.  CI Global Resource

Capital Group Global

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Group Global are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, Capital Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CI Global Resource

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Resource are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, CI Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Capital Group and CI Global

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

The idea behind Capital Group Global and CI Global Resource 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.