Correlation Between CIBC Core and RBC Target
Can any of the company-specific risk be diversified away by investing in both CIBC Core and RBC Target 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 RBC Target 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 RBC Target 2026, you can compare the effects of market volatilities on CIBC Core and RBC Target 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 RBC Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and RBC Target.
Diversification Opportunities for CIBC Core and RBC Target
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIBC and RBC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Fixed and RBC Target 2026 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Target 2026 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 RBC Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Target 2026 has no effect on the direction of CIBC Core i.e., CIBC Core and RBC Target go up and down completely randomly.
Pair Corralation between CIBC Core and RBC Target
Assuming the 90 days trading horizon CIBC Core Fixed is expected to generate 3.37 times more return on investment than RBC Target. However, CIBC Core is 3.37 times more volatile than RBC Target 2026. It trades about 0.12 of its potential returns per unit of risk. RBC Target 2026 is currently generating about 0.19 per unit of risk. If you would invest 1,783 in CIBC Core Fixed on September 1, 2024 and sell it today you would earn a total of 19.00 from holding CIBC Core Fixed or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Core Fixed vs. RBC Target 2026
Performance |
| Timeline |
| CIBC Core Fixed |
| RBC Target 2026 |
CIBC Core and RBC Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Core and RBC Target
The main advantage of trading using opposite CIBC Core and RBC Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, RBC Target 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 RBC Target will offset losses from the drop in RBC Target's long position.| CIBC Core vs. BetaPro Gold Bullion | CIBC Core vs. BetaPro SP TSX | CIBC Core vs. BetaPro SPTSX Capped | CIBC Core vs. Global X Active |
| RBC Target vs. Global X Active | RBC Target vs. Brompton Flaherty Crumrine | RBC Target vs. CIBC Core Fixed | RBC Target vs. BMO Aggregate Bond |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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