Correlation Between CIBC Clean and CIBC Sustainable
Can any of the company-specific risk be diversified away by investing in both CIBC Clean and CIBC Sustainable 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 Sustainable 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 Sustainable Balanced, you can compare the effects of market volatilities on CIBC Clean and CIBC Sustainable 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 Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Clean and CIBC Sustainable.
Diversification Opportunities for CIBC Clean and CIBC Sustainable
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIBC and CIBC is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Clean Energy and CIBC Sustainable Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Sustainable Balanced 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 Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Sustainable Balanced has no effect on the direction of CIBC Clean i.e., CIBC Clean and CIBC Sustainable go up and down completely randomly.
Pair Corralation between CIBC Clean and CIBC Sustainable
If you would invest 2,045 in CIBC Sustainable Balanced on November 27, 2024 and sell it today you would earn a total of 0.00 from holding CIBC Sustainable Balanced or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Clean Energy vs. CIBC Sustainable Balanced
Performance |
| Timeline |
| CIBC Clean Energy |
| CIBC Sustainable Balanced |
CIBC Clean and CIBC Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Clean and CIBC Sustainable
The main advantage of trading using opposite CIBC Clean and CIBC Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Clean position performs unexpectedly, CIBC Sustainable 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 Sustainable will offset losses from the drop in CIBC Sustainable's long position.| CIBC Clean vs. CIBC Core Fixed | CIBC Clean vs. CIBC Canadian Equity | CIBC Clean vs. CIBC Conservative Fixed | CIBC Clean vs. CIBC Qx Low |
| CIBC Sustainable vs. CIBC Core Fixed | CIBC Sustainable vs. CIBC Canadian Equity | CIBC Sustainable vs. CIBC Clean Energy | CIBC Sustainable vs. CIBC Conservative Fixed |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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