Correlation Between Dynamic Active and CI Munro

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

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

Diversification Opportunities for Dynamic Active and CI Munro

0.89

Correlation Coefficient

Dynamic Active  CI Munro

Very poor diversification

The 3 months correlation between Dynamic and CMAG is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Active Global and CI Munro Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Munro Alternative and Dynamic Active 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 Active Global are associated (or correlated) with CI Munro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Munro Alternative has no effect on the direction of Dynamic Active i.e., Dynamic Active and CI Munro go up and down completely randomly.

Pair Corralation between Dynamic Active and CI Munro

Assuming the 90 days trading horizon Dynamic Active Global is expected to generate 0.9 times more return on investment than CI Munro. However, Dynamic Active Global is 1.11 times less risky than CI Munro. It trades about -0.08 of its potential returns per unit of risk. CI Munro Alternative is currently generating about -0.08 per unit of risk. If you would invest  6,764  in Dynamic Active Global on December 30, 2024 and sell it today you would lose (473.00) from holding Dynamic Active Global or give up 6.99% of portfolio value over 90 days.

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

Dynamic Active Global  vs.  CI Munro Alternative

Dynamic Active Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynamic Active Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

CI Munro Alternative

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Munro Alternative has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Dynamic Active and CI Munro

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

The idea behind Dynamic Active Global and CI Munro Alternative 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.