Correlation Between Canadian Imperial and Medallion Bank
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Medallion Bank 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 Medallion Bank 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 Medallion Bank PR, you can compare the effects of market volatilities on Canadian Imperial and Medallion Bank 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 Medallion Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Medallion Bank.
Diversification Opportunities for Canadian Imperial and Medallion Bank
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Medallion is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Medallion Bank PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Bank PR 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 Medallion Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Bank PR has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Medallion Bank go up and down completely randomly.
Pair Corralation between Canadian Imperial and Medallion Bank
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 0.52 times more return on investment than Medallion Bank. However, Canadian Imperial Bank is 1.94 times less risky than Medallion Bank. It trades about 0.24 of its potential returns per unit of risk. Medallion Bank PR is currently generating about 0.06 per unit of risk. If you would invest 6,330 in Canadian Imperial Bank on August 27, 2024 and sell it today you would earn a total of 212.00 from holding Canadian Imperial Bank or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Medallion Bank PR
Performance |
| Timeline |
| Canadian Imperial Bank |
| Medallion Bank PR |
Canadian Imperial and Medallion Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Medallion Bank
The main advantage of trading using opposite Canadian Imperial and Medallion Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Medallion Bank 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 Medallion Bank will offset losses from the drop in Medallion Bank'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 |
| Medallion Bank vs. Merchants Bancorp | Medallion Bank vs. Medalist Diversified Reit | Medallion Bank vs. Northern Trust | Medallion Bank vs. First Citizens BancShares |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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