Correlation Between NVIDIA and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Canadian Imperial Bank, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Canadian Imperial.
Diversification Opportunities for NVIDIA and Canadian Imperial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NVIDIA and Canadian is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA 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 NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Canadian Imperial go up and down completely randomly.
Pair Corralation between NVIDIA and Canadian Imperial
Given the investment horizon of 90 days NVIDIA is expected to under-perform the Canadian Imperial. In addition to that, NVIDIA is 1.96 times more volatile than Canadian Imperial Bank. It trades about -0.14 of its total potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.13 per unit of volatility. If you would invest 6,451 in Canadian Imperial Bank on September 12, 2024 and sell it today you would earn a total of 197.00 from holding Canadian Imperial Bank or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Canadian Imperial Bank
Performance |
| Timeline |
| NVIDIA |
| Canadian Imperial Bank |
NVIDIA and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Canadian Imperial
The main advantage of trading using opposite NVIDIA and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Canadian Imperial vs. Bank of America | Canadian Imperial vs. Victory Integrity Smallmid Cap | Canadian Imperial vs. Hilton Worldwide Holdings | Canadian Imperial vs. NVIDIA |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |