Correlation Between Millbank Mining and CI Financial

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

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

Diversification Opportunities for Millbank Mining and CI Financial

-0.55

Correlation Coefficient

Millbank Mining  CI Financial

Excellent diversification

The 3 months correlation between Millbank and CIX is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Millbank Mining Corp and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Millbank Mining 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 Millbank Mining Corp are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Millbank Mining i.e., Millbank Mining and CI Financial go up and down completely randomly.

Pair Corralation between Millbank Mining and CI Financial

Assuming the 90 days trading horizon Millbank Mining Corp is expected to generate 12.67 times more return on investment than CI Financial. However, Millbank Mining is 12.67 times more volatile than CI Financial Corp. It trades about 0.07 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.28 per unit of risk. If you would invest  47.00  in Millbank Mining Corp on October 23, 2024 and sell it today you would earn a total of  1.00  from holding Millbank Mining Corp or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.78%
Values	Daily Returns

Millbank Mining Corp  vs.  CI Financial Corp

Millbank Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millbank Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Millbank Mining is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CI Financial Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Millbank Mining and CI Financial

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

The idea behind Millbank Mining Corp and CI Financial Corp 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.