Correlation Between CI Canadian and Harvest Global

Can any of the company-specific risk be diversified away by investing in both CI Canadian and Harvest 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 Harvest 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 Harvest Global REIT, you can compare the effects of market volatilities on CI Canadian and Harvest 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 Harvest Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and Harvest Global.

Diversification Opportunities for CI Canadian and Harvest Global

0.91

Correlation Coefficient

CI Canadian  Harvest Global

Almost no diversification

The 3 months correlation between RIT and Harvest is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian REIT and Harvest Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Global REIT 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 Harvest Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Global REIT has no effect on the direction of CI Canadian i.e., CI Canadian and Harvest Global go up and down completely randomly.

Pair Corralation between CI Canadian and Harvest Global

Assuming the 90 days trading horizon CI Canadian is expected to generate 4.95 times less return on investment than Harvest Global. But when comparing it to its historical volatility, CI Canadian REIT is 1.08 times less risky than Harvest Global. It trades about 0.0 of its potential returns per unit of risk. Harvest Global REIT is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  554.00  in Harvest Global REIT on November 20, 2024 and sell it today you would earn a total of  39.00  from holding Harvest Global REIT or generate 7.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

CI Canadian REIT  vs.  Harvest Global REIT

CI Canadian REIT

Risk-Adjusted Performance

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 very healthy basic indicators, CI Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Harvest Global REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvest Global REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Harvest 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 Harvest Global

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

The idea behind CI Canadian REIT and Harvest Global REIT 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.