Correlation Between Canadian Imperial and Lycos Energy
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Lycos Energy 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 Lycos Energy 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 Lycos Energy, you can compare the effects of market volatilities on Canadian Imperial and Lycos Energy 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 Lycos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Lycos Energy.
Diversification Opportunities for Canadian Imperial and Lycos Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Lycos is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Lycos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lycos Energy 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 Lycos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lycos Energy has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Lycos Energy go up and down completely randomly.
Pair Corralation between Canadian Imperial and Lycos Energy
Assuming the 90 days trading horizon Canadian Imperial is expected to generate 4.14 times less return on investment than Lycos Energy. But when comparing it to its historical volatility, Canadian Imperial Bank is 15.44 times less risky than Lycos Energy. It trades about 0.21 of its potential returns per unit of risk. Lycos Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Lycos Energy on September 5, 2024 and sell it today you would earn a total of 8.00 from holding Lycos Energy or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Lycos Energy
Performance |
| Timeline |
| Canadian Imperial Bank |
| Lycos Energy |
Canadian Imperial and Lycos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Lycos Energy
The main advantage of trading using opposite Canadian Imperial and Lycos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Lycos Energy 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 Lycos Energy will offset losses from the drop in Lycos Energy's long position.The idea behind Canadian Imperial Bank and Lycos Energy 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.| Lycos Energy vs. Profound Medical Corp | Lycos Energy vs. Brookfield Office Properties | Lycos Energy vs. Marimaca Copper Corp | Lycos Energy vs. QC Copper and |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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