Correlation Between CI Global and TD Active

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

By analyzing existing cross correlation between CI Global Infrastructure and TD Active Global, you can compare the effects of market volatilities on CI Global and TD Active 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 TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and TD Active.

Diversification Opportunities for CI Global and TD Active

0.83

Correlation Coefficient

CI Global  TD Active

Very poor diversification

The 3 months correlation between CINF and TINF is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Infrastructure and TD Active Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active Global 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 Infrastructure are associated (or correlated) with TD Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Active Global has no effect on the direction of CI Global i.e., CI Global and TD Active go up and down completely randomly.

Pair Corralation between CI Global and TD Active

Assuming the 90 days trading horizon CI Global is expected to generate 1.19 times less return on investment than TD Active. But when comparing it to its historical volatility, CI Global Infrastructure is 1.02 times less risky than TD Active. It trades about 0.11 of its potential returns per unit of risk. TD Active Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,084  in TD Active Global on December 29, 2024 and sell it today you would earn a total of  135.00  from holding TD Active Global or generate 6.48% return on investment over 90 days.

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

CI Global Infrastructure  vs.  TD Active Global

CI Global Infrastructure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Infrastructure are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TD Active Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TD Active Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD Active may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CI Global and TD Active

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

The idea behind CI Global Infrastructure and TD Active Global 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..