Correlation Between CDN IMPERIAL and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and FIREWEED METALS 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 FIREWEED METALS 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 FIREWEED METALS P, you can compare the effects of market volatilities on CDN IMPERIAL and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and FIREWEED METALS.
Diversification Opportunities for CDN IMPERIAL and FIREWEED METALS
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CDN and FIREWEED is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and FIREWEED METALS go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and FIREWEED METALS
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 39.11 times less return on investment than FIREWEED METALS. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 2.5 times less risky than FIREWEED METALS. It trades about 0.01 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 88.00 in FIREWEED METALS P on October 30, 2024 and sell it today you would earn a total of 14.00 from holding FIREWEED METALS P or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. FIREWEED METALS P
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| FIREWEED METALS P |
CDN IMPERIAL and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and FIREWEED METALS
The main advantage of trading using opposite CDN IMPERIAL and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
| FIREWEED METALS vs. FAST RETAIL ADR | FIREWEED METALS vs. Planet Fitness | FIREWEED METALS vs. PICKN PAY STORES | FIREWEED METALS vs. Molina Healthcare |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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