Correlation Between CDN IMPERIAL and SILICON LABORATOR
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and SILICON LABORATOR 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 SILICON LABORATOR 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 SILICON LABORATOR, you can compare the effects of market volatilities on CDN IMPERIAL and SILICON LABORATOR 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 SILICON LABORATOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and SILICON LABORATOR.
Diversification Opportunities for CDN IMPERIAL and SILICON LABORATOR
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDN and SILICON is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and SILICON LABORATOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILICON LABORATOR 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 SILICON LABORATOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILICON LABORATOR has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and SILICON LABORATOR go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and SILICON LABORATOR
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 3.91 times less return on investment than SILICON LABORATOR. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 2.7 times less risky than SILICON LABORATOR. It trades about 0.1 of its potential returns per unit of risk. SILICON LABORATOR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 10,400 in SILICON LABORATOR on October 24, 2024 and sell it today you would earn a total of 2,700 from holding SILICON LABORATOR or generate 25.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. SILICON LABORATOR
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| SILICON LABORATOR |
CDN IMPERIAL and SILICON LABORATOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and SILICON LABORATOR
The main advantage of trading using opposite CDN IMPERIAL and SILICON LABORATOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, SILICON LABORATOR 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 SILICON LABORATOR will offset losses from the drop in SILICON LABORATOR's long position.| CDN IMPERIAL vs. AGNC INVESTMENT | CDN IMPERIAL vs. ePlay Digital | CDN IMPERIAL vs. SEI INVESTMENTS | CDN IMPERIAL vs. Aristocrat Leisure Limited |
| SILICON LABORATOR vs. UPDATE SOFTWARE | SILICON LABORATOR vs. Virtu Financial | SILICON LABORATOR vs. CDN IMPERIAL BANK | SILICON LABORATOR vs. MAGIC SOFTWARE ENTR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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