Correlation Between CIBC Canadian and Mackenzie Large
Can any of the company-specific risk be diversified away by investing in both CIBC Canadian and Mackenzie Large 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 Mackenzie Large 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 Mackenzie Large Cap, you can compare the effects of market volatilities on CIBC Canadian and Mackenzie Large 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 Mackenzie Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Canadian and Mackenzie Large.
Diversification Opportunities for CIBC Canadian and Mackenzie Large
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CIBC and Mackenzie is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Canadian Equity and Mackenzie Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Large Cap 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 Mackenzie Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Large Cap has no effect on the direction of CIBC Canadian i.e., CIBC Canadian and Mackenzie Large go up and down completely randomly.
Pair Corralation between CIBC Canadian and Mackenzie Large
Assuming the 90 days trading horizon CIBC Canadian Equity is expected to generate 0.83 times more return on investment than Mackenzie Large. However, CIBC Canadian Equity is 1.21 times less risky than Mackenzie Large. It trades about 0.35 of its potential returns per unit of risk. Mackenzie Large Cap is currently generating about 0.25 per unit of risk. If you would invest 2,678 in CIBC Canadian Equity on September 12, 2024 and sell it today you would earn a total of 105.00 from holding CIBC Canadian Equity or generate 3.92% 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. Mackenzie Large Cap
Performance |
| Timeline |
| CIBC Canadian Equity |
| Mackenzie Large Cap |
CIBC Canadian and Mackenzie Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Canadian and Mackenzie Large
The main advantage of trading using opposite CIBC Canadian and Mackenzie Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Canadian position performs unexpectedly, Mackenzie Large 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 Mackenzie Large will offset losses from the drop in Mackenzie Large's long position.| CIBC Canadian vs. CIBC Core Fixed | CIBC Canadian vs. CIBC Clean Energy | CIBC Canadian vs. CIBC Conservative Fixed | CIBC Canadian vs. CIBC Qx Low |
| Mackenzie Large vs. Mackenzie Canadian Equity | Mackenzie Large vs. BMO MSCI EAFE | Mackenzie Large vs. Goldman Sachs ActiveBeta | Mackenzie Large vs. BMO Long Federal |
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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