Correlation Between Canadian Imperial and Everest
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Everest 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 Everest 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 Everest Group, you can compare the effects of market volatilities on Canadian Imperial and Everest 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 Everest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Everest.
Diversification Opportunities for Canadian Imperial and Everest
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Everest is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group 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 Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Everest go up and down completely randomly.
Pair Corralation between Canadian Imperial and Everest
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 0.73 times more return on investment than Everest. However, Canadian Imperial Bank is 1.37 times less risky than Everest. It trades about 0.18 of its potential returns per unit of risk. Everest Group is currently generating about 0.0 per unit of risk. If you would invest 3,922 in Canadian Imperial Bank on August 26, 2024 and sell it today you would earn a total of 2,620 from holding Canadian Imperial Bank or generate 66.8% 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. Everest Group
Performance |
| Timeline |
| Canadian Imperial Bank |
| Everest Group |
Canadian Imperial and Everest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Everest
The main advantage of trading using opposite Canadian Imperial and Everest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Everest 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 Everest will offset losses from the drop in Everest's long position.| Canadian Imperial vs. Toronto Dominion Bank | Canadian Imperial vs. Nu Holdings | Canadian Imperial vs. HSBC Holdings PLC | Canadian Imperial vs. Bank of Montreal |
| Everest vs. Brookfield Wealth Solutions | Everest vs. Reinsurance Group of | Everest vs. Renaissancere Holdings | Everest vs. Greenlight Capital Re |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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