Correlation Between CI Preferred and Evolve Active

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

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

Diversification Opportunities for CI Preferred and Evolve Active

0.99

Correlation Coefficient

CI Preferred  Evolve Active

No risk reduction

The 3 months correlation between FPR and Evolve is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding CI Preferred Share and Evolve Active Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Active Canadian and CI Preferred 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 Preferred Share are associated (or correlated) with Evolve Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Active Canadian has no effect on the direction of CI Preferred i.e., CI Preferred and Evolve Active go up and down completely randomly.

Pair Corralation between CI Preferred and Evolve Active

Assuming the 90 days trading horizon CI Preferred Share is expected to generate 1.37 times more return on investment than Evolve Active. However, CI Preferred is 1.37 times more volatile than Evolve Active Canadian. It trades about 0.34 of its potential returns per unit of risk. Evolve Active Canadian is currently generating about 0.41 per unit of risk. If you would invest  2,206  in CI Preferred Share on April 22, 2025 and sell it today you would earn a total of  229.00  from holding CI Preferred Share or generate 10.38% return on investment over 90 days.

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

CI Preferred Share  vs.  Evolve Active Canadian

CI Preferred Share

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CI Preferred Share are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Preferred may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Evolve Active Canadian

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Active Canadian are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Evolve Active may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CI Preferred and Evolve Active

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

The idea behind CI Preferred Share and Evolve Active 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.