Correlation Between CDN IMPERIAL and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and SOGECLAIR 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 CDN IMPERIAL and SOGECLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN IMPERIAL BANK and SOGECLAIR SA INH, you can compare the effects of market volatilities on CDN IMPERIAL and SOGECLAIR 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 CDN IMPERIAL with a short position of SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and SOGECLAIR.
Diversification Opportunities for CDN IMPERIAL and SOGECLAIR
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDN and SOGECLAIR is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH and CDN IMPERIAL 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 CDN IMPERIAL BANK are associated (or correlated) with SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and SOGECLAIR go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and SOGECLAIR
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.58 times more return on investment than SOGECLAIR. However, CDN IMPERIAL BANK is 1.72 times less risky than SOGECLAIR. It trades about 0.09 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.02 per unit of risk. If you would invest 3,603 in CDN IMPERIAL BANK on October 16, 2024 and sell it today you would earn a total of 2,410 from holding CDN IMPERIAL BANK or generate 66.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. SOGECLAIR SA INH
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| SOGECLAIR SA INH |
CDN IMPERIAL and SOGECLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and SOGECLAIR
The main advantage of trading using opposite CDN IMPERIAL and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.| CDN IMPERIAL vs. Hisense Home Appliances | CDN IMPERIAL vs. FUYO GENERAL LEASE | CDN IMPERIAL vs. CITY OFFICE REIT | CDN IMPERIAL vs. UNIVMUSIC GRPADR050 |
| SOGECLAIR vs. Delta Air Lines | SOGECLAIR vs. Westinghouse Air Brake | SOGECLAIR vs. CDN IMPERIAL BANK | SOGECLAIR vs. FAIR ISAAC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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