Correlation Between CI Financial and Canadian Net

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

Diversification Opportunities for CI Financial and Canadian Net

0.84

Correlation Coefficient

CI Financial  Canadian Net

Very poor diversification

The 3 months correlation between CIX and Canadian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Canadian Net Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Net Real 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 Canadian Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Net Real has no effect on the direction of CI Financial i.e., CI Financial and Canadian Net go up and down completely randomly.

Pair Corralation between CI Financial and Canadian Net

Assuming the 90 days trading horizon CI Financial is expected to generate 2.69 times less return on investment than Canadian Net. But when comparing it to its historical volatility, CI Financial Corp is 7.3 times less risky than Canadian Net. It trades about 0.15 of its potential returns per unit of risk. Canadian Net Real is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  535.00  in Canadian Net Real on May 11, 2025 and sell it today you would earn a total of  16.00  from holding Canadian Net Real or generate 2.99% return on investment over 90 days.

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

CI Financial Corp  vs.  Canadian Net Real

CI Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 11 (%) 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.

Canadian Net Real

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Net Real are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Canadian Net is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CI Financial and Canadian Net

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

The idea behind CI Financial Corp and Canadian Net Real 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.