Correlation Between Martina Minerals and CI Financial

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

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

Diversification Opportunities for Martina Minerals and CI Financial

0.32

Correlation Coefficient

Martina Minerals  CI Financial

Weak diversification

The 3 months correlation between Martina and CIX is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Martina Minerals 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 Martina Minerals 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 Martina Minerals 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 Martina Minerals i.e., Martina Minerals and CI Financial go up and down completely randomly.

Pair Corralation between Martina Minerals and CI Financial

Assuming the 90 days trading horizon Martina Minerals Corp is expected to generate 214.29 times more return on investment than CI Financial. However, Martina Minerals is 214.29 times more volatile than CI Financial Corp. It trades about 0.22 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.18 per unit of risk. If you would invest  2.50  in Martina Minerals Corp on October 20, 2024 and sell it today you would earn a total of  5.00  from holding Martina Minerals Corp or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Martina Minerals Corp  vs.  CI Financial Corp

Martina Minerals Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Martina Minerals Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Martina Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

CI Financial Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 13 (%) 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 Martina Minerals and CI Financial

The main advantage of trading using opposite Martina Minerals and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martina Minerals 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 Martina Minerals 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.