Correlation Between CDN IMPERIAL and INTER CARS
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and INTER CARS 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 INTER CARS 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 INTER CARS SA, you can compare the effects of market volatilities on CDN IMPERIAL and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and INTER CARS.
Diversification Opportunities for CDN IMPERIAL and INTER CARS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDN and INTER is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and INTER CARS go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and INTER CARS
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 1.62 times less return on investment than INTER CARS. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 2.13 times less risky than INTER CARS. It trades about 0.33 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 10,460 in INTER CARS SA on September 1, 2024 and sell it today you would earn a total of 1,060 from holding INTER CARS SA or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. INTER CARS SA
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| INTER CARS SA |
CDN IMPERIAL and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and INTER CARS
The main advantage of trading using opposite CDN IMPERIAL and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| CDN IMPERIAL vs. Perseus Mining Limited | CDN IMPERIAL vs. ECHO INVESTMENT ZY | CDN IMPERIAL vs. LION ONE METALS | CDN IMPERIAL vs. GREENX METALS LTD |
| INTER CARS vs. Commercial Vehicle Group | INTER CARS vs. Zijin Mining Group | INTER CARS vs. GEELY AUTOMOBILE | INTER CARS vs. Grupo Carso SAB |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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