Correlation Between Canadian Imperial and Highwood Asset
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Highwood Asset 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 Highwood Asset 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 Highwood Asset Management, you can compare the effects of market volatilities on Canadian Imperial and Highwood Asset 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 Highwood Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Highwood Asset.
Diversification Opportunities for Canadian Imperial and Highwood Asset
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Highwood is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Highwood Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwood Asset Management 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 Highwood Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwood Asset Management has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Highwood Asset go up and down completely randomly.
Pair Corralation between Canadian Imperial and Highwood Asset
Assuming the 90 days trading horizon Canadian Imperial is expected to generate 1.23 times less return on investment than Highwood Asset. But when comparing it to its historical volatility, Canadian Imperial Bank is 5.84 times less risky than Highwood Asset. It trades about 0.08 of its potential returns per unit of risk. Highwood Asset Management is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Highwood Asset Management on September 1, 2024 and sell it today you would lose (48.00) from holding Highwood Asset Management or give up 7.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Highwood Asset Management
Performance |
| Timeline |
| Canadian Imperial Bank |
| Highwood Asset Management |
Canadian Imperial and Highwood Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Highwood Asset
The main advantage of trading using opposite Canadian Imperial and Highwood Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Highwood Asset 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 Highwood Asset will offset losses from the drop in Highwood Asset's long position.| Canadian Imperial vs. Capstone Mining Corp | Canadian Imperial vs. Vizsla Silver Corp | Canadian Imperial vs. Renoworks Software | Canadian Imperial vs. Aya Gold Silver |
| Highwood Asset vs. Walmart Inc CDR | Highwood Asset vs. Amazon CDR | Highwood Asset vs. Berkshire Hathaway CDR | Highwood Asset vs. UnitedHealth Group CDR |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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