Correlation Between CIBC Canadian and CIBC Global
Can any of the company-specific risk be diversified away by investing in both CIBC Canadian and CIBC Global 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 CIBC Canadian and CIBC Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Canadian Equity and CIBC Global Growth, you can compare the effects of market volatilities on CIBC Canadian and CIBC Global 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 CIBC Canadian with a short position of CIBC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Canadian and CIBC Global.
Diversification Opportunities for CIBC Canadian and CIBC Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CIBC and CIBC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Canadian Equity and CIBC Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Global Growth and CIBC Canadian 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 CIBC Canadian Equity are associated (or correlated) with CIBC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Global Growth has no effect on the direction of CIBC Canadian i.e., CIBC Canadian and CIBC Global go up and down completely randomly.
Pair Corralation between CIBC Canadian and CIBC Global
Assuming the 90 days trading horizon CIBC Canadian Equity is expected to generate 0.89 times more return on investment than CIBC Global. However, CIBC Canadian Equity is 1.12 times less risky than CIBC Global. It trades about 0.18 of its potential returns per unit of risk. CIBC Global Growth is currently generating about 0.14 per unit of risk. If you would invest 2,070 in CIBC Canadian Equity on September 1, 2024 and sell it today you would earn a total of 709.00 from holding CIBC Canadian Equity or generate 34.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Canadian Equity vs. CIBC Global Growth
Performance |
| Timeline |
| CIBC Canadian Equity |
| CIBC Global Growth |
CIBC Canadian and CIBC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Canadian and CIBC Global
The main advantage of trading using opposite CIBC Canadian and CIBC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Canadian position performs unexpectedly, CIBC Global 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 CIBC Global will offset losses from the drop in CIBC Global's long position.| CIBC Canadian vs. iShares SPTSX 60 | CIBC Canadian vs. iShares Core SPTSX | CIBC Canadian vs. Vanguard FTSE Canada | CIBC Canadian vs. Global X SPTSX |
| CIBC Global vs. Brompton Global Dividend | CIBC Global vs. Brompton European Dividend | CIBC Global vs. Brompton North American | CIBC Global vs. Global Healthcare Income |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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