Correlation Between CI Enhanced and CIBC Global
Can any of the company-specific risk be diversified away by investing in both CI Enhanced and CIBC 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 CI Enhanced and CIBC Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Enhanced Short and CIBC Global Growth, you can compare the effects of market volatilities on CI Enhanced and CIBC 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 CI Enhanced with a short position of CIBC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Enhanced and CIBC Global.
Diversification Opportunities for CI Enhanced and CIBC Global
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSB and CIBC is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CI Enhanced Short and CIBC Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Global Growth and CI Enhanced 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 CI Enhanced Short are associated (or correlated) with CIBC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Global Growth has no effect on the direction of CI Enhanced i.e., CI Enhanced and CIBC Global go up and down completely randomly.
Pair Corralation between CI Enhanced and CIBC Global
Assuming the 90 days trading horizon CI Enhanced is expected to generate 10.86 times less return on investment than CIBC Global. But when comparing it to its historical volatility, CI Enhanced Short is 4.41 times less risky than CIBC Global. It trades about 0.08 of its potential returns per unit of risk. CIBC Global Growth is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,029 in CIBC Global Growth on September 13, 2024 and sell it today you would earn a total of 103.00 from holding CIBC Global Growth or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Enhanced Short vs. CIBC Global Growth
Performance |
| Timeline |
| CI Enhanced Short |
| CIBC Global Growth |
CI Enhanced and CIBC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Enhanced and CIBC Global
The main advantage of trading using opposite CI Enhanced and CIBC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Enhanced position performs unexpectedly, CIBC 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 CIBC Global will offset losses from the drop in CIBC Global's long position.| CI Enhanced vs. CI Investment Grade | CI Enhanced vs. CI Enhanced Government | CI Enhanced vs. CI Preferred Share | CI Enhanced vs. CI Short Term |
| CIBC Global vs. Guardian i3 Global | CIBC Global vs. CI Global Real | CIBC Global vs. CI Enhanced Short | CIBC Global vs. BMO Aggregate Bond |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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