Correlation Between CI Canada and CI Lawrence
Can any of the company-specific risk be diversified away by investing in both CI Canada and CI Lawrence 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 Canada and CI Lawrence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canada Lifeco and CI Lawrence Park, you can compare the effects of market volatilities on CI Canada and CI Lawrence 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 Canada with a short position of CI Lawrence. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and CI Lawrence.
Diversification Opportunities for CI Canada and CI Lawrence
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLI and CRED is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and CI Lawrence Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Lawrence Park and CI Canada 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 Canada Lifeco are associated (or correlated) with CI Lawrence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Lawrence Park has no effect on the direction of CI Canada i.e., CI Canada and CI Lawrence go up and down completely randomly.
Pair Corralation between CI Canada and CI Lawrence
Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 8.11 times more return on investment than CI Lawrence. However, CI Canada is 8.11 times more volatile than CI Lawrence Park. It trades about 0.16 of its potential returns per unit of risk. CI Lawrence Park is currently generating about 0.01 per unit of risk. If you would invest 1,110 in CI Canada Lifeco on December 2, 2024 and sell it today you would earn a total of 66.00 from holding CI Canada Lifeco or generate 5.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CI Canada Lifeco vs. CI Lawrence Park
Performance |
Timeline |
CI Canada Lifeco |
CI Lawrence Park |
CI Canada and CI Lawrence Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CI Canada and CI Lawrence
The main advantage of trading using opposite CI Canada and CI Lawrence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, CI Lawrence 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 Lawrence will offset losses from the drop in CI Lawrence's long position.CI Canada vs. First Asset Energy | CI Canada vs. CI Gold Giants | CI Canada vs. Harvest Equal Weight | CI Canada vs. First Asset Tech |
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Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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