Correlation Between Canadian Imperial and E Split
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and E Split 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 E Split 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 E Split Corp, you can compare the effects of market volatilities on Canadian Imperial and E Split 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 E Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and E Split.
Diversification Opportunities for Canadian Imperial and E Split
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canadian and ENS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and E Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Split 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 E Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Split Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and E Split go up and down completely randomly.
Pair Corralation between Canadian Imperial and E Split
Assuming the 90 days trading horizon Canadian Imperial is expected to generate 2.73 times less return on investment than E Split. But when comparing it to its historical volatility, Canadian Imperial Bank is 1.47 times less risky than E Split. It trades about 0.12 of its potential returns per unit of risk. E Split Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,104 in E Split Corp on August 31, 2024 and sell it today you would earn a total of 273.00 from holding E Split Corp or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. E Split Corp
Performance |
| Timeline |
| Canadian Imperial Bank |
| E Split Corp |
Canadian Imperial and E Split Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and E Split
The main advantage of trading using opposite Canadian Imperial and E Split positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, E Split 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 E Split will offset losses from the drop in E Split's long position.The idea behind Canadian Imperial Bank and E Split Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| E Split vs. Forum Energy Metals | E Split vs. iShares Canadian HYBrid | E Split vs. Brompton European Dividend | E Split vs. Solar Alliance Energy |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |