Correlation Between Tarku Resources and CI Financial

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

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

Diversification Opportunities for Tarku Resources and CI Financial

-0.61

Correlation Coefficient

Tarku Resources  CI Financial

Excellent diversification

The 3 months correlation between Tarku and CIX is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tarku Resources 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 Tarku Resources 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 Tarku Resources 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 Tarku Resources i.e., Tarku Resources and CI Financial go up and down completely randomly.

Pair Corralation between Tarku Resources and CI Financial

Assuming the 90 days horizon Tarku Resources is expected to generate 1.27 times less return on investment than CI Financial. In addition to that, Tarku Resources is 4.12 times more volatile than CI Financial Corp. It trades about 0.04 of its total potential returns per unit of risk. CI Financial Corp is currently generating about 0.21 per unit of volatility. If you would invest  2,101  in CI Financial Corp on September 22, 2024 and sell it today you would earn a total of  985.00  from holding CI Financial Corp or generate 46.88% return on investment over 90 days.

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

Tarku Resources  vs.  CI Financial Corp

Tarku Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tarku Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tarku Resources showed solid returns over the last few months and may actually be approaching a breakup point.

CI Financial Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 18 (%) 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 Tarku Resources and CI Financial

The main advantage of trading using opposite Tarku Resources and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tarku Resources 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 Tarku Resources 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.