Correlation Between CI Financial and Tarku Resources

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

Diversification Opportunities for CI Financial and Tarku Resources

CIXTarkuDiversified AwayCIXTarkuDiversified Away100%
-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CIX and Tarku is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Tarku Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarku Resources 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 Tarku Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarku Resources has no effect on the direction of CI Financial i.e., CI Financial and Tarku Resources go up and down completely randomly.

Pair Corralation between CI Financial and Tarku Resources

Assuming the 90 days trading horizon CI Financial is expected to generate 1.01 times less return on investment than Tarku Resources. But when comparing it to its historical volatility, CI Financial Corp is 5.09 times less risky than Tarku Resources. It trades about 0.17 of its potential returns per unit of risk. Tarku Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Tarku Resources on September 17, 2024 and sell it today you would lose (1.50) from holding Tarku Resources or give up 60.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CI Financial Corp  vs.  Tarku Resources

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -40-20020406080
JavaScript chart by amCharts 3.21.15CIX TKU
       Timeline  
CI Financial Corp 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 19 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1820222426283032
Tarku Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tarku Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.0060.0080.010.0120.0140.0160.0180.02

CI Financial and Tarku Resources Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.43-8.56-5.69-2.820.03.26.449.6912.94 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15CIX TKU
       Returns  

Pair Trading with CI Financial and Tarku Resources

The main advantage of trading using opposite CI Financial and Tarku Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial position performs unexpectedly, Tarku Resources 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 Tarku Resources will offset losses from the drop in Tarku Resources' long position.
The idea behind CI Financial Corp and Tarku Resources 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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