Correlation Between CIBC Core and Desjardins Canadian
Can any of the company-specific risk be diversified away by investing in both CIBC Core and Desjardins Canadian 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 Desjardins Canadian 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 Desjardins Canadian Universe, you can compare the effects of market volatilities on CIBC Core and Desjardins Canadian 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 Desjardins Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and Desjardins Canadian.
Diversification Opportunities for CIBC Core and Desjardins Canadian
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIBC and Desjardins is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Fixed and Desjardins Canadian Universe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins Canadian 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 Desjardins Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desjardins Canadian has no effect on the direction of CIBC Core i.e., CIBC Core and Desjardins Canadian go up and down completely randomly.
Pair Corralation between CIBC Core and Desjardins Canadian
Assuming the 90 days trading horizon CIBC Core Fixed is expected to generate 0.89 times more return on investment than Desjardins Canadian. However, CIBC Core Fixed is 1.13 times less risky than Desjardins Canadian. It trades about 0.08 of its potential returns per unit of risk. Desjardins Canadian Universe is currently generating about 0.06 per unit of risk. If you would invest 1,633 in CIBC Core Fixed on September 2, 2024 and sell it today you would earn a total of 169.00 from holding CIBC Core Fixed or generate 10.35% 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. Desjardins Canadian Universe
Performance |
| Timeline |
| CIBC Core Fixed |
| Desjardins Canadian |
CIBC Core and Desjardins Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Core and Desjardins Canadian
The main advantage of trading using opposite CIBC Core and Desjardins Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, Desjardins Canadian 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 Desjardins Canadian will offset losses from the drop in Desjardins Canadian's long position.| CIBC Core vs. CIBC Canadian Equity | CIBC Core vs. CIBC Clean Energy | CIBC Core vs. CIBC Conservative Fixed | CIBC Core vs. CIBC Qx Low |
| Desjardins Canadian vs. Desjardins Canadian Short | Desjardins Canadian vs. Desjardins Canadian Preferred | Desjardins Canadian vs. Desjardins 1 5 Year | Desjardins Canadian vs. Desjardins 1 5 Year |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |