Correlation Between CDN IMPERIAL and Corporate Office
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on CDN IMPERIAL and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Corporate Office.
Diversification Opportunities for CDN IMPERIAL and Corporate Office
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDN and Corporate is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Corporate Office go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Corporate Office
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.97 times more return on investment than Corporate Office. However, CDN IMPERIAL BANK is 1.04 times less risky than Corporate Office. It trades about 0.16 of its potential returns per unit of risk. Corporate Office Properties is currently generating about 0.14 per unit of risk. If you would invest 4,270 in CDN IMPERIAL BANK on October 12, 2024 and sell it today you would earn a total of 1,853 from holding CDN IMPERIAL BANK or generate 43.4% 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. Corporate Office Properties
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Corporate Office Pro |
CDN IMPERIAL and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Corporate Office
The main advantage of trading using opposite CDN IMPERIAL and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| CDN IMPERIAL vs. CITIC Telecom International | CDN IMPERIAL vs. Canon Marketing Japan | CDN IMPERIAL vs. FAST RETAIL ADR | CDN IMPERIAL vs. Tencent Music Entertainment |
| Corporate Office vs. Benchmark Electronics | Corporate Office vs. Tsingtao Brewery | Corporate Office vs. Thai Beverage Public | Corporate Office vs. Nanjing Panda Electronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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