Correlation Between Canadian Imperial and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Capstone Mining 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 Capstone Mining 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 Capstone Mining Corp, you can compare the effects of market volatilities on Canadian Imperial and Capstone Mining 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 Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Capstone Mining.
Diversification Opportunities for Canadian Imperial and Capstone Mining
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Capstone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp 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 Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Capstone Mining go up and down completely randomly.
Pair Corralation between Canadian Imperial and Capstone Mining
Assuming the 90 days trading horizon Canadian Imperial Bank is expected to generate 0.08 times more return on investment than Capstone Mining. However, Canadian Imperial Bank is 12.29 times less risky than Capstone Mining. It trades about 0.28 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.06 per unit of risk. If you would invest 2,495 in Canadian Imperial Bank on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Canadian Imperial Bank or generate 1.4% 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. Capstone Mining Corp
Performance |
| Timeline |
| Canadian Imperial Bank |
| Capstone Mining Corp |
Canadian Imperial and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Capstone Mining
The main advantage of trading using opposite Canadian Imperial and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Capstone Mining 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| Canadian Imperial vs. Rogers Communications | Canadian Imperial vs. InPlay Oil Corp | Canadian Imperial vs. CI Financial Corp | Canadian Imperial vs. Data Communications Management |
| Capstone Mining vs. Laurentian Bank | Capstone Mining vs. Information Services | Capstone Mining vs. Manulife Financial Corp | Capstone Mining vs. Canadian Imperial Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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