Correlation Between Dynamic Active and CI Canada

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

By analyzing existing cross correlation between Dynamic Active Global and CI Canada Quality, you can compare the effects of market volatilities on Dynamic Active and CI Canada 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 Dynamic Active with a short position of CI Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Active and CI Canada.

Diversification Opportunities for Dynamic Active and CI Canada

0.62

Correlation Coefficient

Dynamic Active  CI Canada

Poor diversification

The 3 months correlation between Dynamic and DGRC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Active Global and CI Canada Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canada Quality and Dynamic Active 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 Dynamic Active Global are associated (or correlated) with CI Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canada Quality has no effect on the direction of Dynamic Active i.e., Dynamic Active and CI Canada go up and down completely randomly.

Pair Corralation between Dynamic Active and CI Canada

Assuming the 90 days trading horizon Dynamic Active Global is expected to generate 1.71 times more return on investment than CI Canada. However, Dynamic Active is 1.71 times more volatile than CI Canada Quality. It trades about 0.07 of its potential returns per unit of risk. CI Canada Quality is currently generating about 0.08 per unit of risk. If you would invest  6,350  in Dynamic Active Global on July 31, 2025 and sell it today you would earn a total of  1,435  from holding Dynamic Active Global or generate 22.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Dynamic Active Global  vs.  CI Canada Quality

Dynamic Active Global

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Active Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Dynamic Active is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Canada Quality

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Canada Quality are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Canada may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Dynamic Active and CI Canada

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

The idea behind Dynamic Active Global and CI Canada Quality 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.