Correlation Between Everyday People and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both Everyday People and Canadian 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 Everyday People and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everyday People Financial and Canadian Imperial Bank, you can compare the effects of market volatilities on Everyday People 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 Everyday People with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everyday People and Canadian Imperial.
Diversification Opportunities for Everyday People and Canadian Imperial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Everyday and Canadian is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Everyday People Financial 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 Everyday People 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 Everyday People Financial 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 Everyday People i.e., Everyday People and Canadian Imperial go up and down completely randomly.
Pair Corralation between Everyday People and Canadian Imperial
Assuming the 90 days horizon Everyday People Financial is expected to under-perform the Canadian Imperial. In addition to that, Everyday People is 17.57 times more volatile than Canadian Imperial Bank. It trades about -0.04 of its total potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.09 per unit of volatility. If you would invest 2,505 in Canadian Imperial Bank on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Canadian Imperial Bank or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everyday People Financial vs. Canadian Imperial Bank
Performance |
| Timeline |
| Everyday People Financial |
| Canadian Imperial Bank |
Everyday People and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everyday People and Canadian Imperial
The main advantage of trading using opposite Everyday People and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everyday People 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.| Everyday People vs. American Hotel Income | Everyday People vs. Maple Peak Investments | Everyday People vs. Westshore Terminals Investment | Everyday People vs. Brookfield Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |