Correlation Between CI Global and CDSPI Global

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

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

Diversification Opportunities for CI Global and CDSPI Global

0.85

Correlation Coefficient

CI Global  CDSPI Global

Very poor diversification

The 3 months correlation between CIG18006 and CDSPI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and CDSPI Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI Global Growth and CI Global 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 Global Alpha are associated (or correlated) with CDSPI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI Global Growth has no effect on the direction of CI Global i.e., CI Global and CDSPI Global go up and down completely randomly.

Pair Corralation between CI Global and CDSPI Global

Assuming the 90 days trading horizon CI Global Alpha is expected to generate 2.12 times more return on investment than CDSPI Global. However, CI Global is 2.12 times more volatile than CDSPI Global Growth. It trades about 0.21 of its potential returns per unit of risk. CDSPI Global Growth is currently generating about 0.1 per unit of risk. If you would invest  9,407  in CI Global Alpha on October 11, 2024 and sell it today you would earn a total of  1,937  from holding CI Global Alpha or generate 20.59% return on investment over 90 days.

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

CI Global Alpha  vs.  CDSPI Global Growth

CI Global Alpha

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, CI Global sustained solid returns over the last few months and may actually be approaching a breakup point.

CDSPI Global Growth

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CDSPI Global Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, CDSPI Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CI Global and CDSPI Global

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

The idea behind CI Global Alpha and CDSPI Global Growth 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.