Correlation Between SIERRA METALS and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both SIERRA METALS and CDN IMPERIAL 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 SIERRA METALS and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIERRA METALS and CDN IMPERIAL BANK, you can compare the effects of market volatilities on SIERRA METALS and CDN IMPERIAL 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 SIERRA METALS with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIERRA METALS and CDN IMPERIAL.
Diversification Opportunities for SIERRA METALS and CDN IMPERIAL
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SIERRA and CDN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SIERRA METALS and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK and SIERRA METALS 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 SIERRA METALS are associated (or correlated) with CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of SIERRA METALS i.e., SIERRA METALS and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between SIERRA METALS and CDN IMPERIAL
Assuming the 90 days trading horizon SIERRA METALS is expected to generate 2.25 times more return on investment than CDN IMPERIAL. However, SIERRA METALS is 2.25 times more volatile than CDN IMPERIAL BANK. It trades about 0.32 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.01 per unit of risk. If you would invest 43.00 in SIERRA METALS on October 30, 2024 and sell it today you would earn a total of 15.00 from holding SIERRA METALS or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIERRA METALS vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| SIERRA METALS |
| CDN IMPERIAL BANK |
SIERRA METALS and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIERRA METALS and CDN IMPERIAL
The main advantage of trading using opposite SIERRA METALS and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIERRA METALS position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| SIERRA METALS vs. DATANG INTL POW | SIERRA METALS vs. SILVER BULLET DATA | SIERRA METALS vs. Cass Information Systems | SIERRA METALS vs. EPSILON HEALTHCARE LTD |
| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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