Correlation Between CI Financial and Aftermath Silver

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

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

Diversification Opportunities for CI Financial and Aftermath Silver

0.64

Correlation Coefficient

CI Financial  Aftermath Silver

Poor diversification

The 3 months correlation between CIX and Aftermath is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver and CI Financial 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 Financial Corp are associated (or correlated) with Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of CI Financial i.e., CI Financial and Aftermath Silver go up and down completely randomly.

Pair Corralation between CI Financial and Aftermath Silver

Assuming the 90 days trading horizon CI Financial is expected to generate 4.13 times less return on investment than Aftermath Silver. But when comparing it to its historical volatility, CI Financial Corp is 21.89 times less risky than Aftermath Silver. It trades about 0.1 of its potential returns per unit of risk. Aftermath Silver is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Aftermath Silver on December 5, 2024 and sell it today you would lose (1.00) from holding Aftermath Silver or give up 2.04% of portfolio value over 90 days.

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

CI Financial Corp  vs.  Aftermath Silver

CI Financial Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Aftermath Silver

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Aftermath Silver is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CI Financial and Aftermath Silver

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

The idea behind CI Financial Corp and Aftermath Silver 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.