Correlation Between CI Enhanced and IShares Fundamental
Can any of the company-specific risk be diversified away by investing in both CI Enhanced and IShares Fundamental 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 Enhanced and IShares Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Enhanced Short and iShares Fundamental Hedged, you can compare the effects of market volatilities on CI Enhanced and IShares Fundamental 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 Enhanced with a short position of IShares Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Enhanced and IShares Fundamental.
Diversification Opportunities for CI Enhanced and IShares Fundamental
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FSB and IShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CI Enhanced Short and iShares Fundamental Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Fundamental and CI Enhanced 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 Enhanced Short are associated (or correlated) with IShares Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Fundamental has no effect on the direction of CI Enhanced i.e., CI Enhanced and IShares Fundamental go up and down completely randomly.
Pair Corralation between CI Enhanced and IShares Fundamental
Assuming the 90 days trading horizon CI Enhanced is expected to generate 244.0 times less return on investment than IShares Fundamental. But when comparing it to its historical volatility, CI Enhanced Short is 4.59 times less risky than IShares Fundamental. It trades about 0.0 of its potential returns per unit of risk. iShares Fundamental Hedged is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,225 in iShares Fundamental Hedged on December 10, 2024 and sell it today you would earn a total of 144.00 from holding iShares Fundamental Hedged or generate 2.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CI Enhanced Short vs. iShares Fundamental Hedged
Performance |
Timeline |
CI Enhanced Short |
iShares Fundamental |
CI Enhanced and IShares Fundamental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CI Enhanced and IShares Fundamental
The main advantage of trading using opposite CI Enhanced and IShares Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Enhanced position performs unexpectedly, IShares Fundamental 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 IShares Fundamental will offset losses from the drop in IShares Fundamental's long position.CI Enhanced vs. CI Investment Grade | CI Enhanced vs. CI Enhanced Government | CI Enhanced vs. CI Preferred Share | CI Enhanced vs. CI Short Term |
IShares Fundamental vs. iShares Convertible Bond | IShares Fundamental vs. iShares SP Mid Cap | IShares Fundamental vs. iShares Edge MSCI | IShares Fundamental vs. iShares Flexible Monthly |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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