Correlation Between CI Global and Canoe EIT

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

Diversification Opportunities for CI Global and Canoe EIT

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between FSF and Canoe is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Financial and Canoe EIT Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoe EIT Income 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 Canoe EIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoe EIT Income has no effect on the direction of CI Global i.e., CI Global and Canoe EIT go up and down completely randomly.

Pair Corralation between CI Global and Canoe EIT

Assuming the 90 days trading horizon CI Global Financial is expected to generate 2.12 times more return on investment than Canoe EIT. However, CI Global is 2.12 times more volatile than Canoe EIT Income. It trades about 0.22 of its potential returns per unit of risk. Canoe EIT Income is currently generating about 0.28 per unit of risk. If you would invest  2,928  in CI Global Financial on April 22, 2025 and sell it today you would earn a total of  409.00  from holding CI Global Financial or generate 13.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

CI Global Financial  vs.  Canoe EIT Income

 Performance 
       Timeline  
CI Global Financial 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, CI Global displayed solid returns over the last few months and may actually be approaching a breakup point.
Canoe EIT Income 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Canoe EIT Income are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Canoe EIT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CI Global and Canoe EIT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CI Global and Canoe EIT

The main advantage of trading using opposite CI Global and Canoe EIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global position performs unexpectedly, Canoe EIT 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 Canoe EIT will offset losses from the drop in Canoe EIT's long position.
The idea behind CI Global Financial and Canoe EIT Income 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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