Correlation Between CDN IMPERIAL and ALBIS LEASING
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and ALBIS LEASING 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 ALBIS LEASING 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 ALBIS LEASING AG, you can compare the effects of market volatilities on CDN IMPERIAL and ALBIS LEASING 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 ALBIS LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and ALBIS LEASING.
Diversification Opportunities for CDN IMPERIAL and ALBIS LEASING
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDN and ALBIS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG 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 ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and ALBIS LEASING go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and ALBIS LEASING
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.98 times more return on investment than ALBIS LEASING. However, CDN IMPERIAL BANK is 1.02 times less risky than ALBIS LEASING. It trades about 0.26 of its potential returns per unit of risk. ALBIS LEASING AG is currently generating about 0.19 per unit of risk. If you would invest 4,374 in CDN IMPERIAL BANK on September 3, 2024 and sell it today you would earn a total of 1,745 from holding CDN IMPERIAL BANK or generate 39.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. ALBIS LEASING AG
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| ALBIS LEASING AG |
CDN IMPERIAL and ALBIS LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and ALBIS LEASING
The main advantage of trading using opposite CDN IMPERIAL and ALBIS LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, ALBIS LEASING 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 ALBIS LEASING will offset losses from the drop in ALBIS LEASING's long position.| CDN IMPERIAL vs. TOTAL GABON | CDN IMPERIAL vs. Walgreens Boots Alliance | CDN IMPERIAL vs. Peak Resources Limited |
| ALBIS LEASING vs. TOTAL GABON | ALBIS LEASING vs. Walgreens Boots Alliance | ALBIS LEASING vs. Peak Resources Limited |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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