Correlation Between CI Global and Edgepoint Cdn

Can any of the company-specific risk be diversified away by investing in both CI Global and Edgepoint Cdn 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 Edgepoint Cdn 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 Edgepoint Cdn Growth, you can compare the effects of market volatilities on CI Global and Edgepoint Cdn 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 Edgepoint Cdn. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and Edgepoint Cdn.

Diversification Opportunities for CI Global and Edgepoint Cdn

0.91

Correlation Coefficient

CI Global  Edgepoint Cdn

Almost no diversification

The 3 months correlation between CIG18006 and Edgepoint is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and Edgepoint Cdn Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Cdn 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 Edgepoint Cdn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Cdn Growth has no effect on the direction of CI Global i.e., CI Global and Edgepoint Cdn go up and down completely randomly.

Pair Corralation between CI Global and Edgepoint Cdn

Assuming the 90 days trading horizon CI Global Alpha is expected to generate 2.93 times more return on investment than Edgepoint Cdn. However, CI Global is 2.93 times more volatile than Edgepoint Cdn Growth. It trades about 0.14 of its potential returns per unit of risk. Edgepoint Cdn Growth is currently generating about 0.1 per unit of risk. If you would invest  4,379  in CI Global Alpha on September 21, 2024 and sell it today you would earn a total of  6,603  from holding CI Global Alpha or generate 150.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.59%
Values	Daily Returns

CI Global Alpha  vs.  Edgepoint Cdn Growth

CI Global Alpha

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CI Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Edgepoint Cdn Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady forward-looking indicators, Edgepoint Cdn is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with CI Global and Edgepoint Cdn

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

The idea behind CI Global Alpha and Edgepoint Cdn 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.