Correlation Between Descartes Systems and CI Canadian

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

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

Diversification Opportunities for Descartes Systems and CI Canadian

-0.29

Correlation Coefficient

Descartes Systems  CI Canadian

Very good diversification

The 3 months correlation between Descartes and CIC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Descartes Systems Group and CI Canadian Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Banks and Descartes Systems 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 Descartes Systems Group are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Banks has no effect on the direction of Descartes Systems i.e., Descartes Systems and CI Canadian go up and down completely randomly.

Pair Corralation between Descartes Systems and CI Canadian

Assuming the 90 days trading horizon Descartes Systems Group is expected to under-perform the CI Canadian. In addition to that, Descartes Systems is 6.28 times more volatile than CI Canadian Banks. It trades about -0.01 of its total potential returns per unit of risk. CI Canadian Banks is currently generating about 0.67 per unit of volatility. If you would invest  1,133  in CI Canadian Banks on April 24, 2025 and sell it today you would earn a total of  170.00  from holding CI Canadian Banks or generate 15.0% return on investment over 90 days.

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

Descartes Systems Group  vs.  CI Canadian Banks

Descartes Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Descartes Systems Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Descartes Systems is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Descartes Systems and CI Canadian

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

The idea behind Descartes Systems Group and CI Canadian Banks 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 CEOs Directory module to screen CEOs from public companies around the world.