Correlation Between CDN IMPERIAL and Lion One
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on CDN IMPERIAL and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Lion One.
Diversification Opportunities for CDN IMPERIAL and Lion One
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDN and Lion is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Lion One go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Lion One
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 43.05 times less return on investment than Lion One. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 7.34 times less risky than Lion One. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Lion One Metals on November 2, 2024 and sell it today you would earn a total of 5.00 from holding Lion One Metals or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Lion One Metals
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Lion One Metals |
CDN IMPERIAL and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Lion One
The main advantage of trading using opposite CDN IMPERIAL and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| CDN IMPERIAL vs. DISTRICT METALS | CDN IMPERIAL vs. Yuexiu Transport Infrastructure | CDN IMPERIAL vs. ECHO INVESTMENT ZY | CDN IMPERIAL vs. AGNC INVESTMENT |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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