Correlation Between CDN IMPERIAL and Deutsche Pfandbriefbank
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank AG, you can compare the effects of market volatilities on CDN IMPERIAL and Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Deutsche Pfandbriefbank.
Diversification Opportunities for CDN IMPERIAL and Deutsche Pfandbriefbank
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDN and Deutsche is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Deutsche Pfandbriefbank go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Deutsche Pfandbriefbank
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.41 times more return on investment than Deutsche Pfandbriefbank. However, CDN IMPERIAL BANK is 2.42 times less risky than Deutsche Pfandbriefbank. It trades about 0.2 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about 0.05 per unit of risk. If you would invest 5,048 in CDN IMPERIAL BANK on November 2, 2024 and sell it today you would earn a total of 1,123 from holding CDN IMPERIAL BANK or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Deutsche Pfandbriefbank AG
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Deutsche Pfandbriefbank |
CDN IMPERIAL and Deutsche Pfandbriefbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Deutsche Pfandbriefbank
The main advantage of trading using opposite CDN IMPERIAL and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank'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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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