Correlation Between CDN IMPERIAL and REMEDY ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ, you can compare the effects of market volatilities on CDN IMPERIAL and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and REMEDY ENTERTAINMENT.
Diversification Opportunities for CDN IMPERIAL and REMEDY ENTERTAINMENT
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CDN and REMEDY is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and REMEDY ENTERTAINMENT go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and REMEDY ENTERTAINMENT
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 4.75 times less return on investment than REMEDY ENTERTAINMENT. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 2.08 times less risky than REMEDY ENTERTAINMENT. It trades about 0.09 of its potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,328 in REMEDY ENTERTAINMENT OYJ on October 26, 2024 and sell it today you would earn a total of 116.00 from holding REMEDY ENTERTAINMENT OYJ or generate 8.73% 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. REMEDY ENTERTAINMENT OYJ
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| REMEDY ENTERTAINMENT OYJ |
CDN IMPERIAL and REMEDY ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and REMEDY ENTERTAINMENT
The main advantage of trading using opposite CDN IMPERIAL and REMEDY ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT will offset losses from the drop in REMEDY ENTERTAINMENT's long position.| CDN IMPERIAL vs. De Grey Mining | CDN IMPERIAL vs. FIREWEED METALS P | CDN IMPERIAL vs. Harmony Gold Mining | CDN IMPERIAL vs. Forsys Metals Corp |
| REMEDY ENTERTAINMENT vs. GLG LIFE TECH | REMEDY ENTERTAINMENT vs. Sunny Optical Technology | REMEDY ENTERTAINMENT vs. REVO INSURANCE SPA | REMEDY ENTERTAINMENT 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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