Correlation Between CIBC Core and Harvest Premium
Can any of the company-specific risk be diversified away by investing in both CIBC Core and Harvest Premium 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 Harvest Premium 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 Harvest Premium Yield, you can compare the effects of market volatilities on CIBC Core and Harvest Premium 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 Harvest Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and Harvest Premium.
Diversification Opportunities for CIBC Core and Harvest Premium
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CIBC and Harvest is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Plus and Harvest Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Premium Yield 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 Harvest Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Premium Yield has no effect on the direction of CIBC Core i.e., CIBC Core and Harvest Premium go up and down completely randomly.
Pair Corralation between CIBC Core and Harvest Premium
Assuming the 90 days trading horizon CIBC Core Plus is expected to generate 0.42 times more return on investment than Harvest Premium. However, CIBC Core Plus is 2.39 times less risky than Harvest Premium. It trades about 0.12 of its potential returns per unit of risk. Harvest Premium Yield is currently generating about 0.04 per unit of risk. If you would invest 1,622 in CIBC Core Plus on August 26, 2024 and sell it today you would earn a total of 163.00 from holding CIBC Core Plus or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Core Plus vs. Harvest Premium Yield
Performance |
| Timeline |
| CIBC Core Plus |
| Harvest Premium Yield |
CIBC Core and Harvest Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Core and Harvest Premium
The main advantage of trading using opposite CIBC Core and Harvest Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, Harvest Premium 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 Harvest Premium will offset losses from the drop in Harvest Premium'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 |
| Harvest Premium vs. Franklin Global Aggregate | Harvest Premium vs. CI Enhanced Government | Harvest Premium vs. PIMCO Global Short | Harvest Premium vs. CIBC Core Plus |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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