Correlation Between Blockchain Technologies and CIBC Canadian
Can any of the company-specific risk be diversified away by investing in both Blockchain Technologies and CIBC Canadian 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 Blockchain Technologies and CIBC Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blockchain Technologies ETF and CIBC Canadian Equity, you can compare the effects of market volatilities on Blockchain Technologies and CIBC Canadian 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 Blockchain Technologies with a short position of CIBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Technologies and CIBC Canadian.
Diversification Opportunities for Blockchain Technologies and CIBC Canadian
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blockchain and CIBC is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Technologies ETF and CIBC Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Canadian Equity and Blockchain Technologies 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 Blockchain Technologies ETF are associated (or correlated) with CIBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Canadian Equity has no effect on the direction of Blockchain Technologies i.e., Blockchain Technologies and CIBC Canadian go up and down completely randomly.
Pair Corralation between Blockchain Technologies and CIBC Canadian
Assuming the 90 days trading horizon Blockchain Technologies ETF is expected to generate 4.26 times more return on investment than CIBC Canadian. However, Blockchain Technologies is 4.26 times more volatile than CIBC Canadian Equity. It trades about 0.12 of its potential returns per unit of risk. CIBC Canadian Equity is currently generating about 0.21 per unit of risk. If you would invest 1,477 in Blockchain Technologies ETF on September 1, 2024 and sell it today you would earn a total of 640.00 from holding Blockchain Technologies ETF or generate 43.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Blockchain Technologies ETF vs. CIBC Canadian Equity
Performance |
| Timeline |
| Blockchain Technologies |
| CIBC Canadian Equity |
Blockchain Technologies and CIBC Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blockchain Technologies and CIBC Canadian
The main advantage of trading using opposite Blockchain Technologies and CIBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Technologies position performs unexpectedly, CIBC Canadian 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 Canadian will offset losses from the drop in CIBC Canadian's long position.| Blockchain Technologies vs. Global X Big | Blockchain Technologies vs. Evolve Automobile Innovation | Blockchain Technologies vs. Evolve E Gaming Index | Blockchain Technologies vs. Evolve Cyber Security |
| CIBC Canadian vs. iShares SPTSX 60 | CIBC Canadian vs. iShares Core SPTSX | CIBC Canadian vs. Vanguard FTSE Canada | CIBC Canadian vs. Global X SPTSX |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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