Correlation Between BetaPro SP and CIBC Core
Can any of the company-specific risk be diversified away by investing in both BetaPro SP and CIBC Core 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 BetaPro SP and CIBC Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP TSX and CIBC Core Fixed, you can compare the effects of market volatilities on BetaPro SP and CIBC Core 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 BetaPro SP with a short position of CIBC Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and CIBC Core.
Diversification Opportunities for BetaPro SP and CIBC Core
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and CIBC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP TSX and CIBC Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Core Fixed and BetaPro SP 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 BetaPro SP TSX are associated (or correlated) with CIBC Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Core Fixed has no effect on the direction of BetaPro SP i.e., BetaPro SP and CIBC Core go up and down completely randomly.
Pair Corralation between BetaPro SP and CIBC Core
Assuming the 90 days trading horizon BetaPro SP TSX is expected to under-perform the CIBC Core. In addition to that, BetaPro SP is 4.91 times more volatile than CIBC Core Fixed. It trades about -0.03 of its total potential returns per unit of risk. CIBC Core Fixed is currently generating about 0.12 per unit of volatility. If you would invest 1,786 in CIBC Core Fixed on November 30, 2024 and sell it today you would earn a total of 23.00 from holding CIBC Core Fixed or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP TSX vs. CIBC Core Fixed
Performance |
| Timeline |
| BetaPro SP TSX |
| CIBC Core Fixed |
BetaPro SP and CIBC Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and CIBC Core
The main advantage of trading using opposite BetaPro SP and CIBC Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP position performs unexpectedly, CIBC Core 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 Core will offset losses from the drop in CIBC Core's long position.| BetaPro SP vs. BetaPro SPTSX Capped | BetaPro SP vs. BetaPro SPTSX Capped | BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro Gold Bullion |
| CIBC Core vs. CIBC Canadian Equity | CIBC Core vs. CIBC Clean Energy | CIBC Core vs. CIBC Conservative Fixed | CIBC Core vs. CIBC Qx Low |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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