Correlation Between CI Canadian and Hamilton Canadian

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

By analyzing existing cross correlation between CI Canadian Banks and Hamilton Canadian Financials, you can compare the effects of market volatilities on CI Canadian and Hamilton Canadian 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 Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canadian and Hamilton Canadian.

Diversification Opportunities for CI Canadian and Hamilton Canadian

0.99

Correlation Coefficient

CI Canadian  Hamilton Canadian

No risk reduction

The 3 months correlation between CIC and Hamilton is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding CI Canadian Banks and Hamilton Canadian Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian 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 Banks are associated (or correlated) with Hamilton Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Canadian has no effect on the direction of CI Canadian i.e., CI Canadian and Hamilton Canadian go up and down completely randomly.

Pair Corralation between CI Canadian and Hamilton Canadian

Assuming the 90 days trading horizon CI Canadian Banks is expected to generate 0.86 times more return on investment than Hamilton Canadian. However, CI Canadian Banks is 1.16 times less risky than Hamilton Canadian. It trades about 0.18 of its potential returns per unit of risk. Hamilton Canadian Financials is currently generating about 0.12 per unit of risk. If you would invest  1,142  in CI Canadian Banks on April 21, 2025 and sell it today you would earn a total of  156.00  from holding CI Canadian Banks or generate 13.66% return on investment over 90 days.

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

CI Canadian Banks  vs.  Hamilton Canadian Financials

CI Canadian Banks

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canadian Banks are ranked lower than 53 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, CI Canadian displayed solid returns over the last few months and may actually be approaching a breakup point.

Hamilton Canadian

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Canadian Financials are ranked lower than 39 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hamilton Canadian displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI Canadian and Hamilton Canadian

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

The idea behind CI Canadian Banks and Hamilton Canadian Financials 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.