Correlation Between CIBC Active and CIBC International
Can any of the company-specific risk be diversified away by investing in both CIBC Active and CIBC International 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 CIBC Active and CIBC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Active Investment and CIBC International Equity, you can compare the effects of market volatilities on CIBC Active and CIBC International 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 CIBC Active with a short position of CIBC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Active and CIBC International.
Diversification Opportunities for CIBC Active and CIBC International
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIBC and CIBC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Active Investment and CIBC International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC International Equity and CIBC Active 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 CIBC Active Investment are associated (or correlated) with CIBC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC International Equity has no effect on the direction of CIBC Active i.e., CIBC Active and CIBC International go up and down completely randomly.
Pair Corralation between CIBC Active and CIBC International
Assuming the 90 days trading horizon CIBC Active is expected to generate 22.21 times less return on investment than CIBC International. But when comparing it to its historical volatility, CIBC Active Investment is 2.42 times less risky than CIBC International. It trades about 0.04 of its potential returns per unit of risk. CIBC International Equity is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,289 in CIBC International Equity on November 3, 2024 and sell it today you would earn a total of 133.00 from holding CIBC International Equity or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Active Investment vs. CIBC International Equity
Performance |
| Timeline |
| CIBC Active Investment |
| CIBC International Equity |
CIBC Active and CIBC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Active and CIBC International
The main advantage of trading using opposite CIBC Active and CIBC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Active position performs unexpectedly, CIBC International 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 International will offset losses from the drop in CIBC International's long position.| CIBC Active vs. CIBC Active Investment | CIBC Active vs. CIBC Flexible Yield | CIBC Active vs. Global X Active | CIBC Active vs. Brompton Flaherty Crumrine |
| CIBC International vs. Purpose Core Dividend | CIBC International vs. Purpose Premium Yield | CIBC International vs. Purpose Monthly Income | CIBC International vs. Purpose Total Return |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |