Correlation Between Canadian Imperial and Freehold Royalties
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Freehold Royalties 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 Freehold Royalties 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 Freehold Royalties, you can compare the effects of market volatilities on Canadian Imperial and Freehold Royalties 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 Freehold Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Freehold Royalties.
Diversification Opportunities for Canadian Imperial and Freehold Royalties
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Freehold is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Freehold Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freehold Royalties 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 Freehold Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freehold Royalties has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Freehold Royalties go up and down completely randomly.
Pair Corralation between Canadian Imperial and Freehold Royalties
Assuming the 90 days horizon Canadian Imperial Bank is expected to under-perform the Freehold Royalties. In addition to that, Canadian Imperial is 1.01 times more volatile than Freehold Royalties. It trades about -0.05 of its total potential returns per unit of risk. Freehold Royalties is currently generating about 0.2 per unit of volatility. If you would invest 1,265 in Freehold Royalties on October 22, 2024 and sell it today you would earn a total of 36.00 from holding Freehold Royalties or generate 2.85% 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. Freehold Royalties
Performance |
| Timeline |
| Canadian Imperial Bank |
| Freehold Royalties |
Canadian Imperial and Freehold Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Freehold Royalties
The main advantage of trading using opposite Canadian Imperial and Freehold Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Freehold Royalties 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 Freehold Royalties will offset losses from the drop in Freehold Royalties' 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 |
| Freehold Royalties vs. ARC Resources | Freehold Royalties vs. Whitecap Resources | Freehold Royalties vs. Peyto ExplorationDevelopment Corp | Freehold Royalties vs. Tourmaline Oil 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |