Correlation Between CDN IMPERIAL and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and InPlay Oil 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 InPlay Oil 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 InPlay Oil Corp, you can compare the effects of market volatilities on CDN IMPERIAL and InPlay Oil 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 InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and InPlay Oil.
Diversification Opportunities for CDN IMPERIAL and InPlay Oil
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CDN and InPlay is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and InPlay Oil go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and InPlay Oil
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.41 times more return on investment than InPlay Oil. However, CDN IMPERIAL BANK is 2.42 times less risky than InPlay Oil. It trades about 0.17 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.02 per unit of risk. If you would invest 5,299 in CDN IMPERIAL BANK on October 18, 2024 and sell it today you would earn a total of 737.00 from holding CDN IMPERIAL BANK or generate 13.91% 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. InPlay Oil Corp
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| InPlay Oil Corp |
CDN IMPERIAL and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and InPlay Oil
The main advantage of trading using opposite CDN IMPERIAL and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| CDN IMPERIAL vs. Harmony Gold Mining | CDN IMPERIAL vs. FIREWEED METALS P | CDN IMPERIAL vs. Zijin Mining Group | CDN IMPERIAL vs. GOODYEAR T RUBBER |
| InPlay Oil vs. USWE SPORTS AB | InPlay Oil vs. CDN IMPERIAL BANK | InPlay Oil vs. Yuexiu Transport Infrastructure | InPlay Oil vs. REVO INSURANCE SPA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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