Correlation Between IShares SP and CI First

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

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

Diversification Opportunities for IShares SP and CI First

-0.53

Correlation Coefficient

IShares SP  CI First

Excellent diversification

The 3 months correlation between IShares and MXF is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Global and CI First Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI First Asset and IShares SP 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 iShares SP Global are associated (or correlated) with CI First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI First Asset has no effect on the direction of IShares SP i.e., IShares SP and CI First go up and down completely randomly.

Pair Corralation between IShares SP and CI First

Assuming the 90 days trading horizon iShares SP Global is expected to generate 0.53 times more return on investment than CI First. However, iShares SP Global is 1.87 times less risky than CI First. It trades about 0.29 of its potential returns per unit of risk. CI First Asset is currently generating about -0.19 per unit of risk. If you would invest  5,762  in iShares SP Global on September 23, 2024 and sell it today you would earn a total of  320.00  from holding iShares SP Global or generate 5.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

iShares SP Global  vs.  CI First Asset

iShares SP Global

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SP Global are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, IShares SP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CI First Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI First Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with IShares SP and CI First

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

The idea behind iShares SP Global and CI First Asset 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.