Correlation Between Hamilton Canadian and CI Global

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Can any of the company-specific risk be diversified away by investing in both Hamilton Canadian and CI Global 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 Hamilton Canadian and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Canadian Bank and CI Global Financial, you can compare the effects of market volatilities on Hamilton Canadian and CI Global 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 Hamilton Canadian with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Canadian and CI Global.

Diversification Opportunities for Hamilton Canadian and CI Global

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Hamilton and FSF is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Canadian Bank and CI Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Financial and Hamilton Canadian 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 Hamilton Canadian Bank are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Financial has no effect on the direction of Hamilton Canadian i.e., Hamilton Canadian and CI Global go up and down completely randomly.

Pair Corralation between Hamilton Canadian and CI Global

Assuming the 90 days trading horizon Hamilton Canadian Bank is expected to under-perform the CI Global. But the etf apears to be less risky and, when comparing its historical volatility, Hamilton Canadian Bank is 2.52 times less risky than CI Global. The etf trades about -0.18 of its potential returns per unit of risk. The CI Global Financial is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,100  in CI Global Financial on October 8, 2024 and sell it today you would lose (25.00) from holding CI Global Financial or give up 0.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Hamilton Canadian Bank  vs.  CI Global Financial

 Performance 
       Timeline  
Hamilton Canadian Bank 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Canadian Bank are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Hamilton Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
CI Global Financial 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, CI Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hamilton Canadian and CI Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hamilton Canadian and CI Global

The main advantage of trading using opposite Hamilton Canadian and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Canadian position performs unexpectedly, CI Global 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 Global will offset losses from the drop in CI Global's long position.
The idea behind Hamilton Canadian Bank and CI Global Financial 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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