Correlation Between CI Global and Brompton North

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

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

Diversification Opportunities for CI Global and Brompton North

0.94

Correlation Coefficient

CI Global  Brompton North

Almost no diversification

The 3 months correlation between FSF and Brompton is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Financial and Brompton North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton North American and CI Global 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 Global Financial are associated (or correlated) with Brompton North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton North American has no effect on the direction of CI Global i.e., CI Global and Brompton North go up and down completely randomly.

Pair Corralation between CI Global and Brompton North

Assuming the 90 days trading horizon CI Global is expected to generate 1.1 times less return on investment than Brompton North. In addition to that, CI Global is 1.11 times more volatile than Brompton North American. It trades about 0.2 of its total potential returns per unit of risk. Brompton North American is currently generating about 0.25 per unit of volatility. If you would invest  2,225  in Brompton North American on April 24, 2025 and sell it today you would earn a total of  281.00  from holding Brompton North American or generate 12.63% return on investment over 90 days.

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

CI Global Financial  vs.  Brompton North American

CI Global Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, CI Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Brompton North American

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton North American are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Brompton North may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CI Global and Brompton North

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

The idea behind CI Global Financial and Brompton North American 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.