Correlation Between CI Canada and Global X

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

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

Diversification Opportunities for CI Canada and Global X

0.97

Correlation Coefficient

CI Canada  Global X

Almost no diversification

The 3 months correlation between DGRC and Global is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Quality and Global X Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Canadian and CI Canada 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 Canada Quality are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Canadian has no effect on the direction of CI Canada i.e., CI Canada and Global X go up and down completely randomly.

Pair Corralation between CI Canada and Global X

Assuming the 90 days trading horizon CI Canada is expected to generate 1.0 times less return on investment than Global X. In addition to that, CI Canada is 1.05 times more volatile than Global X Canadian. It trades about 0.36 of its total potential returns per unit of risk. Global X Canadian is currently generating about 0.38 per unit of volatility. If you would invest  5,229  in Global X Canadian on April 21, 2025 and sell it today you would earn a total of  610.00  from holding Global X Canadian or generate 11.67% return on investment over 90 days.

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

CI Canada Quality  vs.  Global X Canadian

CI Canada Quality

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canada Quality are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Canada may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Global X Canadian

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Canadian are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CI Canada and Global X

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

The idea behind CI Canada Quality and Global X Canadian 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.