Correlation Between CIBC Core and Franklin Global
Can any of the company-specific risk be diversified away by investing in both CIBC Core and Franklin Global 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 CIBC Core and Franklin Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Core Plus and Franklin Global Aggregate, you can compare the effects of market volatilities on CIBC Core and Franklin Global 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 CIBC Core with a short position of Franklin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and Franklin Global.
Diversification Opportunities for CIBC Core and Franklin Global
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CIBC and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Plus and Franklin Global Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Global Aggregate and CIBC Core 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 CIBC Core Plus are associated (or correlated) with Franklin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Global Aggregate has no effect on the direction of CIBC Core i.e., CIBC Core and Franklin Global go up and down completely randomly.
Pair Corralation between CIBC Core and Franklin Global
Assuming the 90 days trading horizon CIBC Core Plus is expected to generate 15.26 times more return on investment than Franklin Global. However, CIBC Core is 15.26 times more volatile than Franklin Global Aggregate. It trades about 0.03 of its potential returns per unit of risk. Franklin Global Aggregate is currently generating about 0.03 per unit of risk. If you would invest 1,624 in CIBC Core Plus on August 28, 2024 and sell it today you would earn a total of 161.00 from holding CIBC Core Plus or generate 9.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
CIBC Core Plus vs. Franklin Global Aggregate
Performance |
Timeline |
CIBC Core Plus |
Franklin Global Aggregate |
CIBC Core and Franklin Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CIBC Core and Franklin Global
The main advantage of trading using opposite CIBC Core and Franklin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, Franklin Global 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 Franklin Global will offset losses from the drop in Franklin Global's long position.CIBC Core vs. CIBC Core Fixed | CIBC Core vs. CIBC Canadian Equity | CIBC Core vs. CIBC Clean Energy | CIBC Core vs. CIBC Conservative Fixed |
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 CEOs Directory module to screen CEOs from public companies around the world.
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