Correlation Between CIBC International and IShares Core
Can any of the company-specific risk be diversified away by investing in both CIBC International and IShares Core 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 International and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC International Equity and iShares Core MSCI, you can compare the effects of market volatilities on CIBC International and IShares Core 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 International with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC International and IShares Core.
Diversification Opportunities for CIBC International and IShares Core
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CIBC and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CIBC International Equity and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and CIBC International 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 International Equity are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of CIBC International i.e., CIBC International and IShares Core go up and down completely randomly.
Pair Corralation between CIBC International and IShares Core
Assuming the 90 days trading horizon CIBC International is expected to generate 1.46 times less return on investment than IShares Core. In addition to that, CIBC International is 1.17 times more volatile than iShares Core MSCI. It trades about 0.05 of its total potential returns per unit of risk. iShares Core MSCI is currently generating about 0.09 per unit of volatility. If you would invest 3,380 in iShares Core MSCI on September 14, 2024 and sell it today you would earn a total of 521.00 from holding iShares Core MSCI or generate 15.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC International Equity vs. iShares Core MSCI
Performance |
| Timeline |
| CIBC International Equity |
| iShares Core MSCI |
CIBC International and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC International and IShares Core
The main advantage of trading using opposite CIBC International and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC International position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| CIBC International vs. iShares Core MSCI | CIBC International vs. Vanguard FTSE Developed | CIBC International vs. iShares MSCI EAFE | CIBC International vs. BMO MSCI EAFE |
| IShares Core vs. Vanguard FTSE Developed | IShares Core vs. iShares MSCI EAFE | IShares Core vs. BMO MSCI EAFE | IShares Core vs. Wealthsimple Developed Markets |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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