Correlation Between ISign Media and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSign Media Solutions and Canadian Imperial Bank, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Canadian Imperial.
Diversification Opportunities for ISign Media and Canadian Imperial
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ISign and Canadian is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions 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 ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Canadian Imperial go up and down completely randomly.
Pair Corralation between ISign Media and Canadian Imperial
Assuming the 90 days horizon iSign Media Solutions is expected to generate 4.81 times more return on investment than Canadian Imperial. However, ISign Media is 4.81 times more volatile than Canadian Imperial Bank. It trades about 0.06 of its potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.2 per unit of risk. If you would invest 1,380 in iSign Media Solutions on September 4, 2024 and sell it today you would earn a total of 16.00 from holding iSign Media Solutions or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
iSign Media Solutions vs. Canadian Imperial Bank
Performance |
| Timeline |
| iSign Media Solutions |
| Canadian Imperial Bank |
ISign Media and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISign Media and Canadian Imperial
The main advantage of trading using opposite ISign Media and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.| ISign Media vs. Quisitive Technology Solutions | ISign Media vs. DGTL Holdings | ISign Media vs. Plurilock Security | ISign Media vs. iShares Canadian HYBrid |
| Canadian Imperial vs. Bip Investment Corp | Canadian Imperial vs. Canadian General Investments | Canadian Imperial vs. Maple Leaf Foods | Canadian Imperial vs. Caribbean Utilities |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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