Correlation Between CIBC Core and Franklin Bissett
Can any of the company-specific risk be diversified away by investing in both CIBC Core and Franklin Bissett 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 Franklin Bissett 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 Franklin Bissett Corporate, you can compare the effects of market volatilities on CIBC Core and Franklin Bissett 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 Franklin Bissett. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and Franklin Bissett.
Diversification Opportunities for CIBC Core and Franklin Bissett
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIBC and Franklin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Fixed and Franklin Bissett Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Bissett Cor 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 Franklin Bissett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Bissett Cor has no effect on the direction of CIBC Core i.e., CIBC Core and Franklin Bissett go up and down completely randomly.
Pair Corralation between CIBC Core and Franklin Bissett
Assuming the 90 days trading horizon CIBC Core is expected to generate 1.29 times less return on investment than Franklin Bissett. But when comparing it to its historical volatility, CIBC Core Fixed is 1.16 times less risky than Franklin Bissett. It trades about 0.07 of its potential returns per unit of risk. Franklin Bissett Corporate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,578 in Franklin Bissett Corporate on September 2, 2024 and sell it today you would earn a total of 230.00 from holding Franklin Bissett Corporate or generate 14.58% 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. Franklin Bissett Corporate
Performance |
| Timeline |
| CIBC Core Fixed |
| Franklin Bissett Cor |
CIBC Core and Franklin Bissett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Core and Franklin Bissett
The main advantage of trading using opposite CIBC Core and Franklin Bissett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, Franklin Bissett 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 Franklin Bissett will offset losses from the drop in Franklin Bissett'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 |
| Franklin Bissett vs. Brompton Flaherty Crumrine | Franklin Bissett vs. CIBC Core Fixed | Franklin Bissett vs. BMO Aggregate Bond | Franklin Bissett vs. Brompton European Dividend |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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