Correlation Between PARKWAY LIFE and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both PARKWAY LIFE and CDN IMPERIAL 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 PARKWAY LIFE and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKWAY LIFE REAL and CDN IMPERIAL BANK, you can compare the effects of market volatilities on PARKWAY LIFE and CDN IMPERIAL 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 PARKWAY LIFE with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKWAY LIFE and CDN IMPERIAL.
Diversification Opportunities for PARKWAY LIFE and CDN IMPERIAL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PARKWAY and CDN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PARKWAY LIFE REAL and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK and PARKWAY LIFE 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 PARKWAY LIFE REAL are associated (or correlated) with CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of PARKWAY LIFE i.e., PARKWAY LIFE and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between PARKWAY LIFE and CDN IMPERIAL
Assuming the 90 days trading horizon PARKWAY LIFE REAL is expected to under-perform the CDN IMPERIAL. In addition to that, PARKWAY LIFE is 2.21 times more volatile than CDN IMPERIAL BANK. It trades about -0.01 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.32 per unit of volatility. If you would invest 5,572 in CDN IMPERIAL BANK on September 13, 2024 and sell it today you would earn a total of 821.00 from holding CDN IMPERIAL BANK or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKWAY LIFE REAL vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| PARKWAY LIFE REAL |
| CDN IMPERIAL BANK |
PARKWAY LIFE and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKWAY LIFE and CDN IMPERIAL
The main advantage of trading using opposite PARKWAY LIFE and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKWAY LIFE position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| PARKWAY LIFE vs. Performance Food Group | PARKWAY LIFE vs. INDOFOOD AGRI RES | PARKWAY LIFE vs. AUSTEVOLL SEAFOOD | PARKWAY LIFE vs. Tyson Foods |
| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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