Correlation Between CI Preferred and IShares SPTSX

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

Diversification Opportunities for CI Preferred and IShares SPTSX

0.96

Correlation Coefficient

CI Preferred  IShares SPTSX

Almost no diversification

The 3 months correlation between FPR and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding CI Preferred Share and iShares SPTSX North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX North 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 IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX North has no effect on the direction of CI Preferred i.e., CI Preferred and IShares SPTSX go up and down completely randomly.

Pair Corralation between CI Preferred and IShares SPTSX

Assuming the 90 days trading horizon CI Preferred Share is expected to generate 1.35 times more return on investment than IShares SPTSX. However, CI Preferred is 1.35 times more volatile than iShares SPTSX North. It trades about 0.34 of its potential returns per unit of risk. iShares SPTSX North is currently generating about 0.34 per unit of risk. If you would invest  2,235  in CI Preferred Share on April 25, 2025 and sell it today you would earn a total of  220.00  from holding CI Preferred Share or generate 9.84% 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.  iShares SPTSX North

CI Preferred Share

Risk-Adjusted Performance

Solid

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.

iShares SPTSX North

Risk-Adjusted Performance

Strong

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

Pair Trading with CI Preferred and IShares SPTSX

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

The idea behind CI Preferred Share and iShares SPTSX North 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.