Correlation Between Canadian Imperial and Regional Management
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Regional Management 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 Regional Management 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 Regional Management Corp, you can compare the effects of market volatilities on Canadian Imperial and Regional Management 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 Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Regional Management.
Diversification Opportunities for Canadian Imperial and Regional Management
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Regional is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Regional Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Management 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 Regional Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Management Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Regional Management go up and down completely randomly.
Pair Corralation between Canadian Imperial and Regional Management
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 0.44 times more return on investment than Regional Management. However, Canadian Imperial Bank is 2.26 times less risky than Regional Management. It trades about 0.17 of its potential returns per unit of risk. Regional Management Corp is currently generating about 0.07 per unit of risk. If you would invest 4,557 in Canadian Imperial Bank on August 27, 2024 and sell it today you would earn a total of 1,985 from holding Canadian Imperial Bank or generate 43.56% 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. Regional Management Corp
Performance |
| Timeline |
| Canadian Imperial Bank |
| Regional Management Corp |
Canadian Imperial and Regional Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Regional Management
The main advantage of trading using opposite Canadian Imperial and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Regional Management 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 Regional Management will offset losses from the drop in Regional Management'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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