Correlation Between CI Galaxy and IShares SPTSX

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

By analyzing existing cross correlation between CI Galaxy Multi Crypto and iShares SPTSX 60, you can compare the effects of market volatilities on CI Galaxy and IShares SPTSX 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 Galaxy with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Galaxy and IShares SPTSX.

Diversification Opportunities for CI Galaxy and IShares SPTSX

-0.21

Correlation Coefficient

CI Galaxy  IShares SPTSX

Very good diversification

The 3 months correlation between CMCX-B and IShares is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CI Galaxy Multi Crypto and iShares SPTSX 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX 60 and CI Galaxy 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 Galaxy Multi Crypto are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX 60 has no effect on the direction of CI Galaxy i.e., CI Galaxy and IShares SPTSX go up and down completely randomly.

Pair Corralation between CI Galaxy and IShares SPTSX

Assuming the 90 days trading horizon CI Galaxy Multi Crypto is expected to generate 1.61 times more return on investment than IShares SPTSX. However, CI Galaxy is 1.61 times more volatile than iShares SPTSX 60. It trades about -0.08 of its potential returns per unit of risk. iShares SPTSX 60 is currently generating about -0.24 per unit of risk. If you would invest  1,403  in CI Galaxy Multi Crypto on December 11, 2024 and sell it today you would lose (33.00) from holding CI Galaxy Multi Crypto or give up 2.35% of portfolio value over 90 days.

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

CI Galaxy Multi Crypto  vs.  iShares SPTSX 60

CI Galaxy Multi

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Galaxy Multi Crypto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

iShares SPTSX 60

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares SPTSX 60 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares SPTSX is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CI Galaxy and IShares SPTSX

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

The idea behind CI Galaxy Multi Crypto and iShares SPTSX 60 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.