Correlation Between Canadian Imperial and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and NeXGold 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 NeXGold 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 NeXGold Mining Corp, you can compare the effects of market volatilities on Canadian Imperial and NeXGold 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and NeXGold Mining.
Diversification Opportunities for Canadian Imperial and NeXGold Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and NeXGold is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and NeXGold Mining go up and down completely randomly.
Pair Corralation between Canadian Imperial and NeXGold Mining
Assuming the 90 days trading horizon Canadian Imperial is expected to generate 3.95 times less return on investment than NeXGold Mining. But when comparing it to its historical volatility, Canadian Imperial Bank is 10.96 times less risky than NeXGold Mining. It trades about 0.28 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 65.00 in NeXGold Mining Corp on November 18, 2024 and sell it today you would earn a total of 4.00 from holding NeXGold Mining Corp or generate 6.15% 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. NeXGold Mining Corp
Performance |
| Timeline |
| Canadian Imperial Bank |
| NeXGold Mining Corp |
Canadian Imperial and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and NeXGold Mining
The main advantage of trading using opposite Canadian Imperial and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, NeXGold 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 NeXGold Mining will offset losses from the drop in NeXGold Mining's long position.| Canadian Imperial vs. Nicola Mining | Canadian Imperial vs. Firan Technology Group | Canadian Imperial vs. Micron Technology, | Canadian Imperial vs. Renoworks Software |
| NeXGold Mining vs. TUT Fitness Group | NeXGold Mining vs. National Bank of | NeXGold Mining vs. Olympia Financial Group | NeXGold 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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