Correlation Between Brompton Split and CI Munro

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Can any of the company-specific risk be diversified away by investing in both Brompton Split and CI Munro 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 Brompton Split and CI Munro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Split Corp and CI Munro Alternative, you can compare the effects of market volatilities on Brompton Split and CI Munro 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 Brompton Split with a short position of CI Munro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Split and CI Munro.

Diversification Opportunities for Brompton Split and CI Munro

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Brompton and CMAG is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Split Corp and CI Munro Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Munro Alternative and Brompton Split 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 Brompton Split Corp are associated (or correlated) with CI Munro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Munro Alternative has no effect on the direction of Brompton Split i.e., Brompton Split and CI Munro go up and down completely randomly.

Pair Corralation between Brompton Split and CI Munro

Assuming the 90 days trading horizon Brompton Split Corp is expected to generate 0.96 times more return on investment than CI Munro. However, Brompton Split Corp is 1.04 times less risky than CI Munro. It trades about 0.38 of its potential returns per unit of risk. CI Munro Alternative is currently generating about 0.35 per unit of risk. If you would invest  943.00  in Brompton Split Corp on April 23, 2025 and sell it today you would earn a total of  190.00  from holding Brompton Split Corp or generate 20.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.41%
ValuesDaily Returns

Brompton Split Corp  vs.  CI Munro Alternative

 Performance 
       Timeline  
Brompton Split Corp 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Split Corp are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brompton Split displayed solid returns over the last few months and may actually be approaching a breakup point.
CI Munro Alternative 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CI Munro Alternative are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Munro displayed solid returns over the last few months and may actually be approaching a breakup point.

Brompton Split and CI Munro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brompton Split and CI Munro

The main advantage of trading using opposite Brompton Split and CI Munro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Split position performs unexpectedly, CI Munro 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 Munro will offset losses from the drop in CI Munro's long position.
The idea behind Brompton Split Corp and CI Munro Alternative 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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