Correlation Between American Hotel and CI Financial

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

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

Diversification Opportunities for American Hotel and CI Financial

-0.76

Correlation Coefficient

American Hotel  CI Financial

Pay attention - limited upside

The 3 months correlation between American and CIX is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and American Hotel 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 American Hotel Income are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of American Hotel i.e., American Hotel and CI Financial go up and down completely randomly.

Pair Corralation between American Hotel and CI Financial

Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the CI Financial. In addition to that, American Hotel is 28.49 times more volatile than CI Financial Corp. It trades about -0.08 of its total potential returns per unit of risk. CI Financial Corp is currently generating about 0.22 per unit of volatility. If you would invest  3,123  in CI Financial Corp on April 24, 2025 and sell it today you would earn a total of  55.00  from holding CI Financial Corp or generate 1.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

American Hotel Income  vs.  CI Financial Corp

American Hotel Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Hotel Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CI Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with American Hotel and CI Financial

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

The idea behind American Hotel Income and CI Financial Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.