Correlation Between CDN IMPERIAL and RESOLUTION MINERALS
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and RESOLUTION MINERALS 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 RESOLUTION MINERALS 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 RESOLUTION MINERALS LTD, you can compare the effects of market volatilities on CDN IMPERIAL and RESOLUTION MINERALS 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 RESOLUTION MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and RESOLUTION MINERALS.
Diversification Opportunities for CDN IMPERIAL and RESOLUTION MINERALS
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CDN and RESOLUTION is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and RESOLUTION MINERALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RESOLUTION MINERALS LTD 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 RESOLUTION MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RESOLUTION MINERALS LTD has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and RESOLUTION MINERALS go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and RESOLUTION MINERALS
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 25.79 times less return on investment than RESOLUTION MINERALS. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 81.71 times less risky than RESOLUTION MINERALS. It trades about 0.23 of its potential returns per unit of risk. RESOLUTION MINERALS LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.40 in RESOLUTION MINERALS LTD on October 18, 2024 and sell it today you would lose (0.35) from holding RESOLUTION MINERALS LTD or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. RESOLUTION MINERALS LTD
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| RESOLUTION MINERALS LTD |
CDN IMPERIAL and RESOLUTION MINERALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and RESOLUTION MINERALS
The main advantage of trading using opposite CDN IMPERIAL and RESOLUTION MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, RESOLUTION MINERALS 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 RESOLUTION MINERALS will offset losses from the drop in RESOLUTION MINERALS's long position.| CDN IMPERIAL vs. Jacquet Metal Service | CDN IMPERIAL vs. CHINA SOUTHN AIR H | CDN IMPERIAL vs. Stag Industrial | CDN IMPERIAL vs. DELTA AIR LINES |
| RESOLUTION MINERALS vs. CDN IMPERIAL BANK | RESOLUTION MINERALS vs. Sun Life Financial | RESOLUTION MINERALS vs. INTERSHOP Communications Aktiengesellschaft | RESOLUTION MINERALS vs. Erste Group Bank |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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