Correlation Between Enbridge Pref and Canadian Imperial
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By analyzing existing cross correlation between Enbridge Pref 5 and Canadian Imperial Bank, you can compare the effects of market volatilities on Enbridge Pref and Canadian 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 Enbridge Pref with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Canadian Imperial.
Diversification Opportunities for Enbridge Pref and Canadian Imperial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enbridge and Canadian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Canadian Imperial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Imperial Bank and Enbridge Pref 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 Enbridge Pref 5 are associated (or correlated) with Canadian Imperial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Imperial Bank has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Canadian Imperial go up and down completely randomly.
Pair Corralation between Enbridge Pref and Canadian Imperial
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to generate 2.8 times more return on investment than Canadian Imperial. However, Enbridge Pref is 2.8 times more volatile than Canadian Imperial Bank. It trades about 0.04 of its potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.08 per unit of risk. If you would invest 1,723 in Enbridge Pref 5 on August 24, 2024 and sell it today you would earn a total of 677.00 from holding Enbridge Pref 5 or generate 39.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.99% |
| Values | Daily Returns |
Enbridge Pref 5 vs. Canadian Imperial Bank
Performance |
| Timeline |
| Enbridge Pref 5 |
| Canadian Imperial Bank |
Enbridge Pref and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Canadian Imperial
The main advantage of trading using opposite Enbridge Pref and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Canadian 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 Canadian Imperial will offset losses from the drop in Canadian Imperial's long position.| Enbridge Pref vs. Pembina Pipeline Corp | Enbridge Pref vs. Vizsla Silver Corp | Enbridge Pref vs. Bragg Gaming Group | Enbridge Pref vs. Arizona Gold Silver |
| Canadian Imperial vs. Enbridge Pref 5 | Canadian Imperial vs. Enbridge Pref 11 | Canadian Imperial vs. E Split Corp | Canadian Imperial vs. E Split Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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