Correlation Between Voice Mobility and CI Financial

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

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

Diversification Opportunities for Voice Mobility and CI Financial

-0.25

Correlation Coefficient

Voice Mobility  CI Financial

Very good diversification

The 3 months correlation between Voice and CIX is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Voice Mobility International 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 Voice Mobility 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 Voice Mobility International 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 Voice Mobility i.e., Voice Mobility and CI Financial go up and down completely randomly.

Pair Corralation between Voice Mobility and CI Financial

Assuming the 90 days trading horizon Voice Mobility International is expected to generate 3.28 times more return on investment than CI Financial. However, Voice Mobility is 3.28 times more volatile than CI Financial Corp. It trades about 0.16 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.16 per unit of risk. If you would invest  0.50  in Voice Mobility International on October 7, 2024 and sell it today you would earn a total of  0.50  from holding Voice Mobility International or generate 100.0% return on investment over 90 days.

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

Voice Mobility International  vs.  CI Financial Corp

Voice Mobility Inter

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voice Mobility International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Voice Mobility showed solid returns over the last few months and may actually be approaching a breakup point.

CI Financial Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 16 (%) 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 Voice Mobility and CI Financial

The main advantage of trading using opposite Voice Mobility and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voice Mobility 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 Voice Mobility International 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.