Correlation Between CDN IMPERIAL and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Liechtensteinische 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 Liechtensteinische 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 Liechtensteinische Landesbank Aktiengesellschaft, you can compare the effects of market volatilities on CDN IMPERIAL and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Liechtensteinische.
Diversification Opportunities for CDN IMPERIAL and Liechtensteinische
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDN and Liechtensteinische is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Liechtensteinische go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Liechtensteinische
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.73 times more return on investment than Liechtensteinische. However, CDN IMPERIAL BANK is 1.37 times less risky than Liechtensteinische. It trades about 0.2 of its potential returns per unit of risk. Liechtensteinische Landesbank Aktiengesellschaft is currently generating about 0.04 per unit of risk. If you would invest 3,329 in CDN IMPERIAL BANK on September 14, 2024 and sell it today you would earn a total of 2,930 from holding CDN IMPERIAL BANK or generate 88.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Liechtensteinische |
CDN IMPERIAL and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Liechtensteinische
The main advantage of trading using opposite CDN IMPERIAL and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische's long position.| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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