Correlation Between CI Financial and Adobe

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

Diversification Opportunities for CI Financial and Adobe

0.09

Correlation Coefficient

CI Financial  Adobe

Significant diversification

The 3 months correlation between CIX and Adobe is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of CI Financial i.e., CI Financial and Adobe go up and down completely randomly.

Pair Corralation between CI Financial and Adobe

Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.08 times more return on investment than Adobe. However, CI Financial Corp is 11.82 times less risky than Adobe. It trades about 0.15 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.1 per unit of risk. If you would invest  3,066  in CI Financial Corp on December 20, 2024 and sell it today you would earn a total of  55.00  from holding CI Financial Corp or generate 1.79% return on investment over 90 days.

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

CI Financial Corp  vs.  Adobe Inc

CI Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 11 (%) 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.

Adobe Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CI Financial and Adobe

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

The idea behind CI Financial Corp and Adobe Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..