Correlation Between AKITA Drilling and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Canadian 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 AKITA Drilling and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Canadian Imperial Bank, you can compare the effects of market volatilities on AKITA Drilling and Canadian 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 AKITA Drilling with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Canadian Imperial.
Diversification Opportunities for AKITA Drilling and Canadian Imperial
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between AKITA and Canadian is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Canadian Imperial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Imperial Bank and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Canadian Imperial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Imperial Bank has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Canadian Imperial go up and down completely randomly.
Pair Corralation between AKITA Drilling and Canadian Imperial
Assuming the 90 days trading horizon AKITA Drilling is expected to under-perform the Canadian Imperial. In addition to that, AKITA Drilling is 8.78 times more volatile than Canadian Imperial Bank. It trades about -0.06 of its total potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.17 per unit of volatility. If you would invest 2,526 in Canadian Imperial Bank on December 1, 2024 and sell it today you would earn a total of 26.00 from holding Canadian Imperial Bank or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. Canadian Imperial Bank
Performance |
| Timeline |
| AKITA Drilling |
| Canadian Imperial Bank |
AKITA Drilling and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Canadian Imperial
The main advantage of trading using opposite AKITA Drilling and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Canadian 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 Canadian Imperial will offset losses from the drop in Canadian Imperial's long position.| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
| Canadian Imperial vs. Slate Grocery REIT | Canadian Imperial vs. Mako Mining Corp | Canadian Imperial vs. Flow Beverage Corp | Canadian Imperial vs. Primaris Retail RE |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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