Correlation Between Metro AG and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Metro AG 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 Metro AG and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Metro AG 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 Metro AG with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and CDN IMPERIAL.
Diversification Opportunities for Metro AG and CDN IMPERIAL
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metro and CDN is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG 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 Metro AG 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 Metro AG 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 Metro AG i.e., Metro AG and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Metro AG and CDN IMPERIAL
Assuming the 90 days horizon Metro AG is expected to generate 2.13 times more return on investment than CDN IMPERIAL. However, Metro AG is 2.13 times more volatile than CDN IMPERIAL BANK. It trades about -0.01 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about -0.13 per unit of risk. If you would invest 404.00 in Metro AG on October 16, 2024 and sell it today you would lose (3.00) from holding Metro AG or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro AG vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Metro AG |
| CDN IMPERIAL BANK |
Metro AG and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro AG and CDN IMPERIAL
The main advantage of trading using opposite Metro AG and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG 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.| Metro AG vs. CDN IMPERIAL BANK | Metro AG vs. Synovus Financial Corp | Metro AG vs. Webster Financial | Metro AG vs. United Insurance Holdings |
| CDN IMPERIAL vs. Hisense Home Appliances | CDN IMPERIAL vs. FUYO GENERAL LEASE | CDN IMPERIAL vs. CITY OFFICE REIT | CDN IMPERIAL vs. UNIVMUSIC GRPADR050 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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