Correlation Between Canadian Imperial and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Sprott Physical 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 Canadian Imperial and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Imperial Bank and Sprott Physical Gold, you can compare the effects of market volatilities on Canadian Imperial and Sprott Physical 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 Canadian Imperial with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Sprott Physical.
Diversification Opportunities for Canadian Imperial and Sprott Physical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Sprott is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold and Canadian Imperial 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 Canadian Imperial Bank are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Sprott Physical go up and down completely randomly.
Pair Corralation between Canadian Imperial and Sprott Physical
Assuming the 90 days trading horizon Canadian Imperial is expected to generate 2.29 times less return on investment than Sprott Physical. But when comparing it to its historical volatility, Canadian Imperial Bank is 5.76 times less risky than Sprott Physical. It trades about 0.23 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,397 in Sprott Physical Gold on September 15, 2024 and sell it today you would earn a total of 52.00 from holding Sprott Physical Gold or generate 2.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Imperial Bank vs. Sprott Physical Gold
Performance |
Timeline |
Canadian Imperial Bank |
Sprott Physical Gold |
Canadian Imperial and Sprott Physical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Imperial and Sprott Physical
The main advantage of trading using opposite Canadian Imperial and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.Canadian Imperial vs. Enbridge Pref 5 | Canadian Imperial vs. Enbridge Pref 11 | Canadian Imperial vs. Enbridge Pref L | Canadian Imperial vs. E Split Corp |
Sprott Physical vs. CI Financial Corp | Sprott Physical vs. Canso Credit Trust | Sprott Physical vs. Canadian Imperial Bank | Sprott Physical vs. National Bank of |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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