Correlation Between First Asset and CIBC Flexible
Can any of the company-specific risk be diversified away by investing in both First Asset and CIBC Flexible 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 First Asset and CIBC Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Energy and CIBC Flexible Yield, you can compare the effects of market volatilities on First Asset and CIBC Flexible 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 First Asset with a short position of CIBC Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and CIBC Flexible.
Diversification Opportunities for First Asset and CIBC Flexible
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and CIBC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Energy and CIBC Flexible Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Flexible Yield and First Asset 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 First Asset Energy are associated (or correlated) with CIBC Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Flexible Yield has no effect on the direction of First Asset i.e., First Asset and CIBC Flexible go up and down completely randomly.
Pair Corralation between First Asset and CIBC Flexible
Assuming the 90 days trading horizon First Asset is expected to generate 1.1 times less return on investment than CIBC Flexible. In addition to that, First Asset is 6.06 times more volatile than CIBC Flexible Yield. It trades about 0.02 of its total potential returns per unit of risk. CIBC Flexible Yield is currently generating about 0.13 per unit of volatility. If you would invest 1,511 in CIBC Flexible Yield on September 3, 2024 and sell it today you would earn a total of 205.00 from holding CIBC Flexible Yield or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Asset Energy vs. CIBC Flexible Yield
Performance |
| Timeline |
| First Asset Energy |
| CIBC Flexible Yield |
First Asset and CIBC Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Asset and CIBC Flexible
The main advantage of trading using opposite First Asset and CIBC Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset position performs unexpectedly, CIBC Flexible 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 Flexible will offset losses from the drop in CIBC Flexible's long position.| First Asset vs. CI Gold Giants | First Asset vs. First Asset Tech | First Asset vs. CI Canada Lifeco | First Asset vs. Harvest Healthcare Leaders |
| CIBC Flexible vs. First Asset Energy | CIBC Flexible vs. First Asset Tech | CIBC Flexible vs. Harvest Equal Weight | CIBC Flexible vs. CI Canada Lifeco |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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