Correlation Between CI Global and CI High

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

Diversification Opportunities for CI Global and CI High

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between FSF and CSAV is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Financial and CI High Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI High Interest 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 CI High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI High Interest has no effect on the direction of CI Global i.e., CI Global and CI High go up and down completely randomly.

Pair Corralation between CI Global and CI High

Assuming the 90 days trading horizon CI Global Financial is expected to generate 54.14 times more return on investment than CI High. However, CI Global is 54.14 times more volatile than CI High Interest. It trades about 0.18 of its potential returns per unit of risk. CI High Interest is currently generating about 0.62 per unit of risk. If you would invest  3,030  in CI Global Financial on April 23, 2025 and sell it today you would earn a total of  304.00  from holding CI Global Financial or generate 10.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

CI Global Financial  vs.  CI High Interest

 Performance 
       Timeline  
CI Global Financial 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Financial are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, CI Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.
CI High Interest 

Risk-Adjusted Performance

Excellent

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CI High Interest are ranked lower than 48 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI High is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Global and CI High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CI Global and CI High

The main advantage of trading using opposite CI Global and CI High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global position performs unexpectedly, CI High 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 High will offset losses from the drop in CI High's long position.
The idea behind CI Global Financial and CI High Interest 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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