Correlation Between CI Canadian and CI Global

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

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

Diversification Opportunities for CI Canadian and CI Global

-0.42

Correlation Coefficient

CI Canadian  CI Global

Very good diversification

The 3 months correlation between RIT and CINF is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian REIT and CI Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Infrastructure and CI Canadian 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 Canadian REIT 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 Infrastructure has no effect on the direction of CI Canadian i.e., CI Canadian and CI Global go up and down completely randomly.

Pair Corralation between CI Canadian and CI Global

Assuming the 90 days trading horizon CI Canadian is expected to generate 1.78 times less return on investment than CI Global. In addition to that, CI Canadian is 1.41 times more volatile than CI Global Infrastructure. It trades about 0.04 of its total potential returns per unit of risk. CI Global Infrastructure is currently generating about 0.1 per unit of volatility. If you would invest  2,323  in CI Global Infrastructure on October 5, 2024 and sell it today you would earn a total of  410.00  from holding CI Global Infrastructure or generate 17.65% return on investment over 90 days.

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

CI Canadian REIT  vs.  CI Global Infrastructure

CI Canadian REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Canadian REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

CI Global Infrastructure

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Infrastructure are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CI Canadian and CI Global

The main advantage of trading using opposite CI Canadian and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canadian 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 CI Canadian REIT and CI Global Infrastructure 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 Commodity Directory module to find actively traded commodities issued by global exchanges.