Correlation Between Canadian Imperial and Major Drilling
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on Canadian Imperial and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Major Drilling.
Diversification Opportunities for Canadian Imperial and Major Drilling
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Major is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Major Drilling go up and down completely randomly.
Pair Corralation between Canadian Imperial and Major Drilling
Assuming the 90 days trading horizon Canadian Imperial is expected to generate 3.45 times less return on investment than Major Drilling. But when comparing it to its historical volatility, Canadian Imperial Bank is 12.82 times less risky than Major Drilling. It trades about 0.21 of its potential returns per unit of risk. Major Drilling Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 838.00 in Major Drilling Group on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Major Drilling Group or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Major Drilling Group
Performance |
| Timeline |
| Canadian Imperial Bank |
| Major Drilling Group |
Canadian Imperial and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Major Drilling
The main advantage of trading using opposite Canadian Imperial and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling'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 |
| Major Drilling vs. Pason Systems | Major Drilling vs. HudBay Minerals | Major Drilling vs. Ensign Energy Services | Major Drilling vs. Precision Drilling |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |