Correlation Between NBI Unconstrained and CI Galaxy

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

By analyzing existing cross correlation between NBI Unconstrained Fixed and CI Galaxy Blockchain, you can compare the effects of market volatilities on NBI Unconstrained and CI Galaxy 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 NBI Unconstrained with a short position of CI Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Unconstrained and CI Galaxy.

Diversification Opportunities for NBI Unconstrained and CI Galaxy

-0.32

Correlation Coefficient

NBI Unconstrained  CI Galaxy

Very good diversification

The 3 months correlation between NBI and CBCX is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NBI Unconstrained Fixed and CI Galaxy Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Galaxy Blockchain and NBI Unconstrained 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 NBI Unconstrained Fixed are associated (or correlated) with CI Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Galaxy Blockchain has no effect on the direction of NBI Unconstrained i.e., NBI Unconstrained and CI Galaxy go up and down completely randomly.

Pair Corralation between NBI Unconstrained and CI Galaxy

Assuming the 90 days trading horizon NBI Unconstrained Fixed is expected to generate 0.07 times more return on investment than CI Galaxy. However, NBI Unconstrained Fixed is 13.86 times less risky than CI Galaxy. It trades about 0.06 of its potential returns per unit of risk. CI Galaxy Blockchain is currently generating about -0.11 per unit of risk. If you would invest  2,074  in NBI Unconstrained Fixed on December 29, 2024 and sell it today you would earn a total of  23.00  from holding NBI Unconstrained Fixed or generate 1.11% return on investment over 90 days.

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

NBI Unconstrained Fixed  vs.  CI Galaxy Blockchain

NBI Unconstrained Fixed

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NBI Unconstrained Fixed are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, NBI Unconstrained is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Galaxy Blockchain

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Galaxy Blockchain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with NBI Unconstrained and CI Galaxy

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

The idea behind NBI Unconstrained Fixed and CI Galaxy Blockchain 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.