Correlation Between CIBC Clean and CIBC Core
Can any of the company-specific risk be diversified away by investing in both CIBC Clean and CIBC Core 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 Clean and CIBC Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Clean Energy and CIBC Core Fixed, you can compare the effects of market volatilities on CIBC Clean and CIBC Core 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 Clean with a short position of CIBC Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Clean and CIBC Core.
Diversification Opportunities for CIBC Clean and CIBC Core
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between CIBC and CIBC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Clean Energy and CIBC Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Core Fixed and CIBC Clean 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 Clean Energy are associated (or correlated) with CIBC Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Core Fixed has no effect on the direction of CIBC Clean i.e., CIBC Clean and CIBC Core go up and down completely randomly.
Pair Corralation between CIBC Clean and CIBC Core
Assuming the 90 days trading horizon CIBC Clean Energy is expected to under-perform the CIBC Core. In addition to that, CIBC Clean is 5.67 times more volatile than CIBC Core Fixed. It trades about -0.01 of its total potential returns per unit of risk. CIBC Core Fixed is currently generating about 0.1 per unit of volatility. If you would invest 1,643 in CIBC Core Fixed on September 1, 2024 and sell it today you would earn a total of 159.00 from holding CIBC Core Fixed or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
CIBC Clean Energy vs. CIBC Core Fixed
Performance |
| Timeline |
| CIBC Clean Energy |
| CIBC Core Fixed |
CIBC Clean and CIBC Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Clean and CIBC Core
The main advantage of trading using opposite CIBC Clean and CIBC Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Clean position performs unexpectedly, CIBC Core 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 Core will offset losses from the drop in CIBC Core's long position.| CIBC Clean vs. Brompton Global Dividend | CIBC Clean vs. Global Healthcare Income | CIBC Clean vs. Tech Leaders Income | CIBC Clean vs. Brompton North American |
| CIBC Core vs. BetaPro Gold Bullion | CIBC Core vs. BetaPro SP TSX | CIBC Core vs. BetaPro SPTSX Capped | CIBC Core vs. Global X Active |
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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