Correlation Between CDN IMPERIAL and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on CDN IMPERIAL and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Thyssenkrupp.
Diversification Opportunities for CDN IMPERIAL and Thyssenkrupp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDN and Thyssenkrupp is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Thyssenkrupp go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Thyssenkrupp
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 4.14 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 2.27 times less risky than Thyssenkrupp. It trades about 0.2 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 334.00 in thyssenkrupp AG on September 12, 2024 and sell it today you would earn a total of 76.00 from holding thyssenkrupp AG or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. thyssenkrupp AG
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| thyssenkrupp AG |
CDN IMPERIAL and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Thyssenkrupp
The main advantage of trading using opposite CDN IMPERIAL and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| CDN IMPERIAL vs. JD SPORTS FASH | CDN IMPERIAL vs. KRAKATAU STEEL B | CDN IMPERIAL vs. BlueScope Steel Limited | CDN IMPERIAL vs. MITSUBISHI STEEL MFG |
| Thyssenkrupp vs. VIRG NATL BANKSH | Thyssenkrupp vs. WisdomTree Investments | Thyssenkrupp vs. JSC Halyk bank | Thyssenkrupp vs. CDN IMPERIAL 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |