Correlation Between Dynamic Global and CI Global

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

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

Diversification Opportunities for Dynamic Global and CI Global

-0.68

Correlation Coefficient

Dynamic Global  CI Global

Excellent diversification

The 3 months correlation between Dynamic and 0P000070HA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Global Fixed and CI Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Alpha and Dynamic Global 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 Dynamic Global Fixed are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Alpha has no effect on the direction of Dynamic Global i.e., Dynamic Global and CI Global go up and down completely randomly.

Pair Corralation between Dynamic Global and CI Global

Assuming the 90 days trading horizon Dynamic Global Fixed is expected to generate 0.06 times more return on investment than CI Global. However, Dynamic Global Fixed is 16.19 times less risky than CI Global. It trades about 0.18 of its potential returns per unit of risk. CI Global Alpha is currently generating about -0.12 per unit of risk. If you would invest  1,987  in Dynamic Global Fixed on December 26, 2024 and sell it today you would earn a total of  25.00  from holding Dynamic Global Fixed or generate 1.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Dynamic Global Fixed  vs.  CI Global Alpha

Dynamic Global Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Global Fixed are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Dynamic Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

CI Global Alpha

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Global Alpha has generated negative risk-adjusted returns adding no value to fund investors. Despite unfluctuating performance in the last few months, the Fund's basic 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 fund investors.

Pair Trading with Dynamic Global and CI Global

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

The idea behind Dynamic Global Fixed and CI Global Alpha 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.