Correlation Between CDN IMPERIAL and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and GREENX METALS 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 GREENX METALS 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 GREENX METALS LTD, you can compare the effects of market volatilities on CDN IMPERIAL and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and GREENX METALS.
Diversification Opportunities for CDN IMPERIAL and GREENX METALS
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDN and GREENX is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and GREENX METALS go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and GREENX METALS
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.24 times more return on investment than GREENX METALS. However, CDN IMPERIAL BANK is 4.25 times less risky than GREENX METALS. It trades about 0.26 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.03 per unit of risk. If you would invest 4,254 in CDN IMPERIAL BANK on September 22, 2024 and sell it today you would earn a total of 1,887 from holding CDN IMPERIAL BANK or generate 44.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. GREENX METALS LTD
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| GREENX METALS LTD |
CDN IMPERIAL and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and GREENX METALS
The main advantage of trading using opposite CDN IMPERIAL and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
| GREENX METALS vs. Shin Etsu Chemical Co | GREENX METALS vs. GALENA MINING LTD | GREENX METALS vs. Quaker Chemical | GREENX METALS vs. Silicon Motion Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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