Correlation Between CI First and Evolve Cloud

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

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

Diversification Opportunities for CI First and Evolve Cloud

0.05

Correlation Coefficient

CI First  Evolve Cloud

Significant diversification

The 3 months correlation between MXF and Evolve is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CI First Asset and Evolve Cloud Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Cloud Computing and CI First 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 First Asset are associated (or correlated) with Evolve Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Cloud Computing has no effect on the direction of CI First i.e., CI First and Evolve Cloud go up and down completely randomly.

Pair Corralation between CI First and Evolve Cloud

Assuming the 90 days trading horizon CI First Asset is expected to generate 1.12 times more return on investment than Evolve Cloud. However, CI First is 1.12 times more volatile than Evolve Cloud Computing. It trades about 0.11 of its potential returns per unit of risk. Evolve Cloud Computing is currently generating about -0.12 per unit of risk. If you would invest  1,076  in CI First Asset on December 4, 2024 and sell it today you would earn a total of  109.00  from holding CI First Asset or generate 10.13% return on investment over 90 days.

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

CI First Asset  vs.  Evolve Cloud Computing

CI First Asset

Risk-Adjusted Performance

OK

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

Evolve Cloud Computing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolve Cloud Computing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with CI First and Evolve Cloud

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

The idea behind CI First Asset and Evolve Cloud Computing 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.