Correlation Between Eco Atlantic and CI Financial

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

By analyzing existing cross correlation between Eco Atlantic Oil and CI Financial Corp, you can compare the effects of market volatilities on Eco Atlantic and CI Financial 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 Eco Atlantic with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco Atlantic and CI Financial.

Diversification Opportunities for Eco Atlantic and CI Financial

0.23

Correlation Coefficient

Eco Atlantic  CI Financial

Modest diversification

The 3 months correlation between Eco and CIX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eco Atlantic Oil and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Eco Atlantic 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 Eco Atlantic Oil are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Eco Atlantic i.e., Eco Atlantic and CI Financial go up and down completely randomly.

Pair Corralation between Eco Atlantic and CI Financial

Assuming the 90 days horizon Eco Atlantic Oil is expected to under-perform the CI Financial. In addition to that, Eco Atlantic is 1.68 times more volatile than CI Financial Corp. It trades about -0.02 of its total potential returns per unit of risk. CI Financial Corp is currently generating about 0.1 per unit of volatility. If you would invest  1,000.00  in CI Financial Corp on November 29, 2024 and sell it today you would earn a total of  2,138  from holding CI Financial Corp or generate 213.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Eco Atlantic Oil  vs.  CI Financial Corp

Eco Atlantic Oil

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Atlantic Oil are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Eco Atlantic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CI Financial Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Eco Atlantic and CI Financial

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

The idea behind Eco Atlantic Oil and CI Financial Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..