Correlation Between CIBC Conservative and CIBC Core
Can any of the company-specific risk be diversified away by investing in both CIBC Conservative 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 Conservative 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 Conservative Fixed and CIBC Core Fixed, you can compare the effects of market volatilities on CIBC Conservative 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 Conservative with a short position of CIBC Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Conservative and CIBC Core.
Diversification Opportunities for CIBC Conservative and CIBC Core
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIBC and CIBC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Conservative Fixed 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 Conservative 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 Conservative Fixed 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 Conservative i.e., CIBC Conservative and CIBC Core go up and down completely randomly.
Pair Corralation between CIBC Conservative and CIBC Core
Assuming the 90 days trading horizon CIBC Conservative is expected to generate 10.14 times less return on investment than CIBC Core. But when comparing it to its historical volatility, CIBC Conservative Fixed is 2.74 times less risky than CIBC Core. It trades about 0.04 of its potential returns per unit of risk. CIBC Core Fixed is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,780 in CIBC Core Fixed on August 29, 2024 and sell it today you would earn a total of 21.00 from holding CIBC Core Fixed or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CIBC Conservative Fixed vs. CIBC Core Fixed
Performance |
| Timeline |
| CIBC Conservative Fixed |
| CIBC Core Fixed |
CIBC Conservative and CIBC Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Conservative and CIBC Core
The main advantage of trading using opposite CIBC Conservative and CIBC Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Conservative 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 Conservative vs. CIBC Core Fixed | CIBC Conservative vs. CIBC Canadian Equity | CIBC Conservative vs. CIBC Clean Energy | CIBC Conservative vs. CIBC Qx Low |
| CIBC Core vs. CIBC Canadian Equity | CIBC Core vs. CIBC Clean Energy | CIBC Core vs. CIBC Conservative Fixed | CIBC Core vs. CIBC Qx Low |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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