Correlation Between CIBC Qx and First Asset
Can any of the company-specific risk be diversified away by investing in both CIBC Qx and First Asset 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 Qx and First Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Qx Low and First Asset Energy, you can compare the effects of market volatilities on CIBC Qx and First Asset 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 Qx with a short position of First Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Qx and First Asset.
Diversification Opportunities for CIBC Qx and First Asset
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIBC and First is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Qx Low and First Asset Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Asset Energy and CIBC Qx 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 Qx Low are associated (or correlated) with First Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Asset Energy has no effect on the direction of CIBC Qx i.e., CIBC Qx and First Asset go up and down completely randomly.
Pair Corralation between CIBC Qx and First Asset
Assuming the 90 days trading horizon CIBC Qx Low is expected to generate 0.77 times more return on investment than First Asset. However, CIBC Qx Low is 1.3 times less risky than First Asset. It trades about 0.16 of its potential returns per unit of risk. First Asset Energy is currently generating about -0.01 per unit of risk. If you would invest 2,093 in CIBC Qx Low on September 3, 2024 and sell it today you would earn a total of 372.00 from holding CIBC Qx Low or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
CIBC Qx Low vs. First Asset Energy
Performance |
| Timeline |
| CIBC Qx Low |
| First Asset Energy |
CIBC Qx and First Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIBC Qx and First Asset
The main advantage of trading using opposite CIBC Qx and First Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Qx position performs unexpectedly, First Asset 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 First Asset will offset losses from the drop in First Asset's long position.| CIBC Qx vs. First Asset Energy | CIBC Qx vs. First Asset Tech | CIBC Qx vs. Harvest Equal Weight | CIBC Qx vs. CI Canada Lifeco |
| First Asset vs. CI Gold Giants | First Asset vs. First Asset Tech | First Asset vs. CI Canada Lifeco | First Asset vs. Harvest Healthcare Leaders |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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