Correlation Between CI Enhanced and IShares Core

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CI Enhanced and IShares Core 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 Core 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 Core MSCI, you can compare the effects of market volatilities on CI Enhanced and IShares Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Enhanced and IShares Core.

Diversification Opportunities for CI Enhanced and IShares Core

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between FSB and IShares is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CI Enhanced Short and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of CI Enhanced i.e., CI Enhanced and IShares Core go up and down completely randomly.

Pair Corralation between CI Enhanced and IShares Core

Assuming the 90 days trading horizon CI Enhanced Short is expected to generate 0.19 times more return on investment than IShares Core. However, CI Enhanced Short is 5.32 times less risky than IShares Core. It trades about 0.03 of its potential returns per unit of risk. iShares Core MSCI is currently generating about -0.03 per unit of risk. If you would invest  964.00  in CI Enhanced Short on December 27, 2024 and sell it today you would earn a total of  3.00  from holding CI Enhanced Short or generate 0.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CI Enhanced Short  vs.  iShares Core MSCI

 Performance 
       Timeline  
CI Enhanced Short 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CI Enhanced Short are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, CI Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
iShares Core MSCI 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days iShares Core MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Enhanced and IShares Core Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CI Enhanced and IShares Core

The main advantage of trading using opposite CI Enhanced and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Enhanced position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.
The idea behind CI Enhanced Short and iShares Core MSCI 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets