Correlation Between Purpose Tactical and CI Munro

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

By analyzing existing cross correlation between Purpose Tactical Hedged and CI Munro Alternative, you can compare the effects of market volatilities on Purpose Tactical and CI Munro 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 Purpose Tactical with a short position of CI Munro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purpose Tactical and CI Munro.

Diversification Opportunities for Purpose Tactical and CI Munro

0.98

Correlation Coefficient

Purpose Tactical  CI Munro

Almost no diversification

The 3 months correlation between Purpose and CMAG is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Purpose Tactical Hedged and CI Munro Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Munro Alternative and Purpose Tactical 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 Purpose Tactical Hedged are associated (or correlated) with CI Munro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Munro Alternative has no effect on the direction of Purpose Tactical i.e., Purpose Tactical and CI Munro go up and down completely randomly.

Pair Corralation between Purpose Tactical and CI Munro

Assuming the 90 days trading horizon Purpose Tactical is expected to generate 2.48 times less return on investment than CI Munro. But when comparing it to its historical volatility, Purpose Tactical Hedged is 2.06 times less risky than CI Munro. It trades about 0.07 of its potential returns per unit of risk. CI Munro Alternative is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,545  in CI Munro Alternative on April 20, 2025 and sell it today you would earn a total of  1,514  from holding CI Munro Alternative or generate 59.49% return on investment over 90 days.

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

Purpose Tactical Hedged  vs.  CI Munro Alternative

Purpose Tactical Hedged

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Tactical Hedged are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Purpose Tactical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CI Munro Alternative

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CI Munro Alternative are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Munro displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Purpose Tactical and CI Munro

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

The idea behind Purpose Tactical Hedged and CI Munro Alternative 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.