Correlation Between Hamilton Mid and CI Canadian

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

By analyzing existing cross correlation between Hamilton Mid Cap Financials and CI Canadian Banks, you can compare the effects of market volatilities on Hamilton Mid and CI Canadian 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 Hamilton Mid with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Mid and CI Canadian.

Diversification Opportunities for Hamilton Mid and CI Canadian

0.89

Correlation Coefficient

Hamilton Mid  CI Canadian

Very poor diversification

The 3 months correlation between Hamilton and CIC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Mid Cap Financials and CI Canadian Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Banks and Hamilton Mid 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 Hamilton Mid Cap Financials are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Banks has no effect on the direction of Hamilton Mid i.e., Hamilton Mid and CI Canadian go up and down completely randomly.

Pair Corralation between Hamilton Mid and CI Canadian

Assuming the 90 days trading horizon Hamilton Mid Cap Financials is expected to generate 6.28 times more return on investment than CI Canadian. However, Hamilton Mid is 6.28 times more volatile than CI Canadian Banks. It trades about 0.04 of its potential returns per unit of risk. CI Canadian Banks is currently generating about 0.09 per unit of risk. If you would invest  2,343  in Hamilton Mid Cap Financials on April 22, 2025 and sell it today you would earn a total of  1,311  from holding Hamilton Mid Cap Financials or generate 55.95% return on investment over 90 days.

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

Hamilton Mid Cap Financials  vs.  CI Canadian Banks

Hamilton Mid Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Mid Cap Financials are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Hamilton Mid displayed solid returns over the last few months and may actually be approaching a breakup point.

CI Canadian Banks

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canadian Banks are ranked lower than 54 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, CI Canadian displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Mid and CI Canadian

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

The idea behind Hamilton Mid Cap Financials and CI Canadian Banks 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.