Correlation Between CIBC Global and CIBC Clean
Can any of the company-specific risk be diversified away by investing in both CIBC Global and CIBC Clean 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 Global and CIBC Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Global Growth and CIBC Clean Energy, you can compare the effects of market volatilities on CIBC Global and CIBC Clean 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 Global with a short position of CIBC Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Global and CIBC Clean.
Diversification Opportunities for CIBC Global and CIBC Clean
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIBC and CIBC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Global Growth and CIBC Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Clean Energy and CIBC Global 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 Global Growth are associated (or correlated) with CIBC Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Clean Energy has no effect on the direction of CIBC Global i.e., CIBC Global and CIBC Clean go up and down completely randomly.
Pair Corralation between CIBC Global and CIBC Clean
Assuming the 90 days trading horizon CIBC Global Growth is expected to generate 0.45 times more return on investment than CIBC Clean. However, CIBC Global Growth is 2.22 times less risky than CIBC Clean. It trades about -0.11 of its potential returns per unit of risk. CIBC Clean Energy is currently generating about -0.16 per unit of risk. If you would invest 3,089 in CIBC Global Growth on November 27, 2024 and sell it today you would lose (43.00) from holding CIBC Global Growth or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Global Growth vs. CIBC Clean Energy
Performance |
| Timeline |
| CIBC Global Growth |
| CIBC Clean Energy |
CIBC Global and CIBC Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Global and CIBC Clean
The main advantage of trading using opposite CIBC Global and CIBC Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Global position performs unexpectedly, CIBC Clean 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 Clean will offset losses from the drop in CIBC Clean's long position.| CIBC Global vs. CIBC International Equity | CIBC Global vs. CIBC Flexible Yield | CIBC Global vs. Evolve Global Materials | CIBC Global vs. CIBC Equity Index |
| CIBC Clean vs. CIBC Core Fixed | CIBC Clean vs. CIBC Canadian Equity | CIBC Clean vs. CIBC Conservative Fixed | CIBC Clean 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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