Correlation Between Evolve Global and CI Global

Can any of the company-specific risk be diversified away by investing in both Evolve Global 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 Evolve Global and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evolve Global Healthcare and CI Global Climate, you can compare the effects of market volatilities on Evolve Global 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 Evolve Global with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Global and CI Global.

Diversification Opportunities for Evolve Global and CI Global

-0.85

Correlation Coefficient

Evolve Global  CI Global

Pay attention - limited upside

The 3 months correlation between Evolve and CLML is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Global Healthcare and CI Global Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Climate and Evolve Global 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 Evolve Global Healthcare 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 Climate has no effect on the direction of Evolve Global i.e., Evolve Global and CI Global go up and down completely randomly.

Pair Corralation between Evolve Global and CI Global

Assuming the 90 days trading horizon Evolve Global Healthcare is expected to under-perform the CI Global. But the etf apears to be less risky and, when comparing its historical volatility, Evolve Global Healthcare is 1.52 times less risky than CI Global. The etf trades about -0.2 of its potential returns per unit of risk. The CI Global Climate is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  3,454  in CI Global Climate on September 23, 2024 and sell it today you would lose (94.00) from holding CI Global Climate or give up 2.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Evolve Global Healthcare  vs.  CI Global Climate

Evolve Global Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolve Global Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

CI Global Climate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Climate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Evolve Global and CI Global

The main advantage of trading using opposite Evolve Global and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolve Global 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 Evolve Global Healthcare and CI Global Climate 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.