Correlation Between Canadian Imperial and QC Copper
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and QC Copper 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 QC Copper 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 QC Copper and, you can compare the effects of market volatilities on Canadian Imperial and QC Copper 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 QC Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and QC Copper.
Diversification Opportunities for Canadian Imperial and QC Copper
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and QCCU is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and QC Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Copper 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 QC Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Copper has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and QC Copper go up and down completely randomly.
Pair Corralation between Canadian Imperial and QC Copper
Assuming the 90 days trading horizon Canadian Imperial Bank is expected to generate 0.05 times more return on investment than QC Copper. However, Canadian Imperial Bank is 21.74 times less risky than QC Copper. It trades about 0.21 of its potential returns per unit of risk. QC Copper and is currently generating about -0.06 per unit of risk. If you would invest 2,507 in Canadian Imperial Bank on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Canadian Imperial Bank or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. QC Copper and
Performance |
| Timeline |
| Canadian Imperial Bank |
| QC Copper |
Canadian Imperial and QC Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and QC Copper
The main advantage of trading using opposite Canadian Imperial and QC Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, QC Copper 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 QC Copper will offset losses from the drop in QC Copper'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 |
| QC Copper vs. First Majestic Silver | QC Copper vs. Ivanhoe Energy | QC Copper vs. Orezone Gold Corp | QC Copper vs. Faraday Copper Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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