Correlation Between Canadian Imperial and Colossus Resources
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Colossus Resources 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 Colossus Resources 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 Colossus Resources Corp, you can compare the effects of market volatilities on Canadian Imperial and Colossus Resources 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 Colossus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Colossus Resources.
Diversification Opportunities for Canadian Imperial and Colossus Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Colossus is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Colossus Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colossus Resources 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 Colossus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colossus Resources Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Colossus Resources go up and down completely randomly.
Pair Corralation between Canadian Imperial and Colossus Resources
Assuming the 90 days horizon Canadian Imperial is expected to generate 4.71 times less return on investment than Colossus Resources. But when comparing it to its historical volatility, Canadian Imperial Bank is 3.64 times less risky than Colossus Resources. It trades about 0.08 of its potential returns per unit of risk. Colossus Resources Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Colossus Resources Corp on September 21, 2024 and sell it today you would earn a total of 1.00 from holding Colossus Resources Corp or generate 8.33% 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. Colossus Resources Corp
Performance |
| Timeline |
| Canadian Imperial Bank |
| Colossus Resources Corp |
Canadian Imperial and Colossus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Colossus Resources
The main advantage of trading using opposite Canadian Imperial and Colossus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Colossus Resources 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 Colossus Resources will offset losses from the drop in Colossus Resources' long position.| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Bank of Nova | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Toronto Dominion Bank |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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