Correlation Between CI Canada and Evolve Active

Can any of the company-specific risk be diversified away by investing in both CI Canada and Evolve Active 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 Evolve Active 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 Evolve Active Core, you can compare the effects of market volatilities on CI Canada and Evolve Active 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 Evolve Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and Evolve Active.

Diversification Opportunities for CI Canada and Evolve Active

0.26

Correlation Coefficient

CI Canada  Evolve Active

Modest diversification

The 3 months correlation between FLI and Evolve is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and Evolve Active Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Active Core 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 Evolve Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Active Core has no effect on the direction of CI Canada i.e., CI Canada and Evolve Active go up and down completely randomly.

Pair Corralation between CI Canada and Evolve Active

Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 4.92 times more return on investment than Evolve Active. However, CI Canada is 4.92 times more volatile than Evolve Active Core. It trades about 0.16 of its potential returns per unit of risk. Evolve Active Core is currently generating about 0.19 per unit of risk. If you would invest  978.00  in CI Canada Lifeco on September 3, 2024 and sell it today you would earn a total of  221.00  from holding CI Canada Lifeco or generate 22.6% return on investment over 90 days.

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

CI Canada Lifeco  vs.  Evolve Active Core

CI Canada Lifeco

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canada Lifeco are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, CI Canada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Evolve Active Core

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Active Core are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Evolve Active is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CI Canada and Evolve Active

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

The idea behind CI Canada Lifeco and Evolve Active Core 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.