Correlation Between CI Financial and Champion Bear

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

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

Diversification Opportunities for CI Financial and Champion Bear

0.63

Correlation Coefficient

CI Financial  Champion Bear

Poor diversification

The 3 months correlation between CIX and Champion is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources and CI Financial 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 Financial Corp are associated (or correlated) with Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of CI Financial i.e., CI Financial and Champion Bear go up and down completely randomly.

Pair Corralation between CI Financial and Champion Bear

Assuming the 90 days trading horizon CI Financial is expected to generate 28.13 times less return on investment than Champion Bear. But when comparing it to its historical volatility, CI Financial Corp is 97.77 times less risky than Champion Bear. It trades about 0.22 of its potential returns per unit of risk. Champion Bear Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Champion Bear Resources on April 22, 2025 and sell it today you would earn a total of  0.00  from holding Champion Bear Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

CI Financial Corp  vs.  Champion Bear Resources

CI Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Champion Bear Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Champion Bear Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Champion Bear showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI Financial and Champion Bear

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

The idea behind CI Financial Corp and Champion Bear Resources 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.