Correlation Between CIBC Core and IShares 1
Can any of the company-specific risk be diversified away by investing in both CIBC Core and IShares 1 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 Core and IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Core Fixed and iShares 1 10Yr Laddered, you can compare the effects of market volatilities on CIBC Core and IShares 1 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 Core with a short position of IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and IShares 1.
Diversification Opportunities for CIBC Core and IShares 1
Poor diversification
The 3 months correlation between CIBC and IShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Fixed and iShares 1 10Yr Laddered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 10Yr and CIBC Core 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 Core Fixed are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 10Yr has no effect on the direction of CIBC Core i.e., CIBC Core and IShares 1 go up and down completely randomly.
Pair Corralation between CIBC Core and IShares 1
Assuming the 90 days trading horizon CIBC Core Fixed is expected to generate 1.63 times more return on investment than IShares 1. However, CIBC Core is 1.63 times more volatile than iShares 1 10Yr Laddered. It trades about 0.14 of its potential returns per unit of risk. iShares 1 10Yr Laddered is currently generating about -0.01 per unit of risk. If you would invest 1,780 in CIBC Core Fixed on August 28, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Core Fixed vs. iShares 1 10Yr Laddered
Performance |
| Timeline |
| CIBC Core Fixed |
| iShares 1 10Yr |
CIBC Core and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Core and IShares 1
The main advantage of trading using opposite CIBC Core and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, IShares 1 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 IShares 1 will offset losses from the drop in IShares 1's long position.| CIBC Core vs. Mackenzie Core Plus | CIBC Core vs. Mackenzie Unconstrained Bond | CIBC Core vs. Mackenzie Floating Rate | CIBC Core vs. Mackenzie Canadian Short |
| IShares 1 vs. Mackenzie Core Plus | IShares 1 vs. Mackenzie Unconstrained Bond | IShares 1 vs. Mackenzie Floating Rate | IShares 1 vs. Mackenzie Canadian Short |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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