Correlation Between CI Financial and Canfor Pulp

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

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

Diversification Opportunities for CI Financial and Canfor Pulp

-0.71

Correlation Coefficient

CI Financial  Canfor Pulp

Pay attention - limited upside

The 3 months correlation between CIX and Canfor is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Canfor Pulp Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor Pulp Products and CI Financial 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 Financial Corp are associated (or correlated) with Canfor Pulp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor Pulp Products has no effect on the direction of CI Financial i.e., CI Financial and Canfor Pulp go up and down completely randomly.

Pair Corralation between CI Financial and Canfor Pulp

Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.03 times more return on investment than Canfor Pulp. However, CI Financial Corp is 30.73 times less risky than Canfor Pulp. It trades about 0.26 of its potential returns per unit of risk. Canfor Pulp Products is currently generating about -0.04 per unit of risk. If you would invest  3,143  in CI Financial Corp on May 15, 2025 and sell it today you would earn a total of  55.00  from holding CI Financial Corp or generate 1.75% return on investment over 90 days.

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

CI Financial Corp  vs.  Canfor Pulp Products

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 20 (%) 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 latest stock price disarray, may contribute to short-term losses for the investors.

Canfor Pulp Products

Risk-Adjusted Performance

Weakest

Over the last 90 days Canfor Pulp Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CI Financial and Canfor Pulp

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

The idea behind CI Financial Corp and Canfor Pulp Products 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.