Correlation Between Brompton Sustainable and CIBC Flexible
Can any of the company-specific risk be diversified away by investing in both Brompton Sustainable and CIBC Flexible 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 Brompton Sustainable and CIBC Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Sustainable Real and CIBC Flexible Yield, you can compare the effects of market volatilities on Brompton Sustainable and CIBC Flexible 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 Brompton Sustainable with a short position of CIBC Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Sustainable and CIBC Flexible.
Diversification Opportunities for Brompton Sustainable and CIBC Flexible
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brompton and CIBC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Sustainable Real and CIBC Flexible Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Flexible Yield and Brompton Sustainable 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 Brompton Sustainable Real are associated (or correlated) with CIBC Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Flexible Yield has no effect on the direction of Brompton Sustainable i.e., Brompton Sustainable and CIBC Flexible go up and down completely randomly.
Pair Corralation between Brompton Sustainable and CIBC Flexible
Assuming the 90 days trading horizon Brompton Sustainable Real is expected to generate 13.38 times more return on investment than CIBC Flexible. However, Brompton Sustainable is 13.38 times more volatile than CIBC Flexible Yield. It trades about 0.32 of its potential returns per unit of risk. CIBC Flexible Yield is currently generating about 0.04 per unit of risk. If you would invest 2,688 in Brompton Sustainable Real on October 24, 2024 and sell it today you would earn a total of 174.00 from holding Brompton Sustainable Real or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton Sustainable Real vs. CIBC Flexible Yield
Performance |
| Timeline |
| Brompton Sustainable Real |
| CIBC Flexible Yield |
Brompton Sustainable and CIBC Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Sustainable and CIBC Flexible
The main advantage of trading using opposite Brompton Sustainable and CIBC Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Sustainable position performs unexpectedly, CIBC Flexible 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 Flexible will offset losses from the drop in CIBC Flexible's long position.| Brompton Sustainable vs. Brompton Global Dividend | Brompton Sustainable vs. Brompton European Dividend | Brompton Sustainable vs. Brompton North American | Brompton Sustainable vs. Global Healthcare Income |
| CIBC Flexible vs. CIBC Active Investment | CIBC Flexible vs. CIBC Active Investment | CIBC Flexible vs. CIBC Conservative Fixed | CIBC Flexible vs. CIBC Core Fixed |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |