Correlation Between Canadian Imperial and Athene Holding
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Athene Holding 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 Athene Holding 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 Athene Holding, you can compare the effects of market volatilities on Canadian Imperial and Athene Holding 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 Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Athene Holding.
Diversification Opportunities for Canadian Imperial and Athene Holding
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canadian and Athene is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding 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 Athene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athene Holding has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Athene Holding go up and down completely randomly.
Pair Corralation between Canadian Imperial and Athene Holding
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 1.32 times more return on investment than Athene Holding. However, Canadian Imperial is 1.32 times more volatile than Athene Holding. It trades about 0.09 of its potential returns per unit of risk. Athene Holding is currently generating about 0.03 per unit of risk. If you would invest 4,140 in Canadian Imperial Bank on August 27, 2024 and sell it today you would earn a total of 2,402 from holding Canadian Imperial Bank or generate 58.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Athene Holding
Performance |
| Timeline |
| Canadian Imperial Bank |
| Athene Holding |
Canadian Imperial and Athene Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Athene Holding
The main advantage of trading using opposite Canadian Imperial and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Athene Holding 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 Athene Holding will offset losses from the drop in Athene Holding's long position.| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Toronto Dominion Bank | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Citigroup |
| Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding | Athene Holding vs. Argo Group International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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