Correlation Between CI Financial and INTEL CDR

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

Diversification Opportunities for CI Financial and INTEL CDR

-0.15

Correlation Coefficient

CI Financial  INTEL CDR

Good diversification

The 3 months correlation between CIX and INTEL is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of CI Financial i.e., CI Financial and INTEL CDR go up and down completely randomly.

Pair Corralation between CI Financial and INTEL CDR

Assuming the 90 days trading horizon CI Financial Corp is expected to generate 2.68 times more return on investment than INTEL CDR. However, CI Financial is 2.68 times more volatile than INTEL CDR. It trades about 0.22 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.36 per unit of risk. If you would invest  2,369  in CI Financial Corp on September 19, 2024 and sell it today you would earn a total of  720.00  from holding CI Financial Corp or generate 30.39% return on investment over 90 days.

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

CI Financial Corp  vs.  INTEL CDR

CI Financial Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

INTEL CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTEL CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, INTEL CDR is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CI Financial and INTEL CDR

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

The idea behind CI Financial Corp and INTEL CDR 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.