Correlation Between CDN IMPERIAL and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Sibanye Stillwater 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 Sibanye Stillwater 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 Sibanye Stillwater Limited, you can compare the effects of market volatilities on CDN IMPERIAL and Sibanye Stillwater 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 Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Sibanye Stillwater.
Diversification Opportunities for CDN IMPERIAL and Sibanye Stillwater
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDN and Sibanye is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Sibanye Stillwater Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater 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 Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Sibanye Stillwater
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.22 times more return on investment than Sibanye Stillwater. However, CDN IMPERIAL BANK is 4.51 times less risky than Sibanye Stillwater. It trades about 0.14 of its potential returns per unit of risk. Sibanye Stillwater Limited is currently generating about 0.01 per unit of risk. If you would invest 3,300 in CDN IMPERIAL BANK on August 29, 2024 and sell it today you would earn a total of 2,843 from holding CDN IMPERIAL BANK or generate 86.15% 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. Sibanye Stillwater Limited
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Sibanye Stillwater |
CDN IMPERIAL and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Sibanye Stillwater
The main advantage of trading using opposite CDN IMPERIAL and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| CDN IMPERIAL vs. North American Construction | CDN IMPERIAL vs. DATAGROUP SE | CDN IMPERIAL vs. Stewart Information Services | CDN IMPERIAL vs. AGRICULTBK HADR25 YC |
| Sibanye Stillwater vs. CHIBA BANK | Sibanye Stillwater vs. VIRG NATL BANKSH | Sibanye Stillwater vs. Lendlease Group | Sibanye Stillwater vs. CDN IMPERIAL BANK |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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