Correlation Between CIBC Core and PIMCO Global
Can any of the company-specific risk be diversified away by investing in both CIBC Core and PIMCO 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 PIMCO 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 PIMCO Global Short, you can compare the effects of market volatilities on CIBC Core and PIMCO 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 PIMCO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Core and PIMCO Global.
Diversification Opportunities for CIBC Core and PIMCO Global
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CIBC and PIMCO is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Core Plus and PIMCO Global Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Global Short 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 PIMCO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Global Short has no effect on the direction of CIBC Core i.e., CIBC Core and PIMCO Global go up and down completely randomly.
Pair Corralation between CIBC Core and PIMCO Global
Assuming the 90 days trading horizon CIBC Core Plus is expected to generate 43.06 times more return on investment than PIMCO Global. However, CIBC Core is 43.06 times more volatile than PIMCO Global Short. It trades about 0.03 of its potential returns per unit of risk. PIMCO Global Short is currently generating about 0.15 per unit of risk. If you would invest 1,616 in CIBC Core Plus on August 28, 2024 and sell it today you would earn a total of 169.00 from holding CIBC Core Plus or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIBC Core Plus vs. PIMCO Global Short
Performance |
| Timeline |
| CIBC Core Plus |
| PIMCO Global Short |
CIBC Core and PIMCO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Core and PIMCO Global
The main advantage of trading using opposite CIBC Core and PIMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Core position performs unexpectedly, PIMCO 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 PIMCO Global will offset losses from the drop in PIMCO 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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