Correlation Between CI Financial and Midasco Capital

Can any of the company-specific risk be diversified away by investing in both CI Financial and Midasco Capital 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 Midasco Capital 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 Midasco Capital Corp, you can compare the effects of market volatilities on CI Financial and Midasco Capital 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 Midasco Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Midasco Capital.

Diversification Opportunities for CI Financial and Midasco Capital

0.42

Correlation Coefficient

CI Financial  Midasco Capital

Very weak diversification

The 3 months correlation between CIX and Midasco is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Midasco Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midasco Capital Corp 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 Midasco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midasco Capital Corp has no effect on the direction of CI Financial i.e., CI Financial and Midasco Capital go up and down completely randomly.

Pair Corralation between CI Financial and Midasco Capital

Assuming the 90 days trading horizon CI Financial is expected to generate 20.75 times less return on investment than Midasco Capital. But when comparing it to its historical volatility, CI Financial Corp is 43.88 times less risky than Midasco Capital. It trades about 0.23 of its potential returns per unit of risk. Midasco Capital Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Midasco Capital Corp on April 23, 2025 and sell it today you would earn a total of  5.00  from holding Midasco Capital Corp or generate 33.33% return on investment over 90 days.

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

CI Financial Corp  vs.  Midasco Capital Corp

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.

Midasco Capital Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Midasco Capital Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Midasco Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI Financial and Midasco Capital

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

The idea behind CI Financial Corp and Midasco Capital 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.