Correlation Between American Funds and CIBC Conservative
Can any of the company-specific risk be diversified away by investing in both American Funds and CIBC Conservative 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 American Funds and CIBC Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and CIBC Conservative Fixed, you can compare the effects of market volatilities on American Funds and CIBC Conservative 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 American Funds with a short position of CIBC Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and CIBC Conservative.
Diversification Opportunities for American Funds and CIBC Conservative
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and CIBC is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and CIBC Conservative Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Conservative Fixed and American Funds 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 American Funds Fundamental are associated (or correlated) with CIBC Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Conservative Fixed has no effect on the direction of American Funds i.e., American Funds and CIBC Conservative go up and down completely randomly.
Pair Corralation between American Funds and CIBC Conservative
Assuming the 90 days horizon American Funds Fundamental is expected to generate 5.27 times more return on investment than CIBC Conservative. However, American Funds is 5.27 times more volatile than CIBC Conservative Fixed. It trades about 0.2 of its potential returns per unit of risk. CIBC Conservative Fixed is currently generating about 0.13 per unit of risk. If you would invest 8,096 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 322.00 from holding American Funds Fundamental or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
American Funds Fundamental vs. CIBC Conservative Fixed
Performance |
| Timeline |
| American Funds Funda |
| CIBC Conservative Fixed |
American Funds and CIBC Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and CIBC Conservative
The main advantage of trading using opposite American Funds and CIBC Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, CIBC Conservative 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 CIBC Conservative will offset losses from the drop in CIBC Conservative's long position.| American Funds vs. World Energy Fund | American Funds vs. Energy Services Fund | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Icon Natural Resources |
| CIBC Conservative vs. CIBC Core Fixed | CIBC Conservative vs. CIBC Canadian Equity | CIBC Conservative vs. CIBC Clean Energy | CIBC Conservative vs. CIBC Qx Low |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |