Correlation Between Signature Resources and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both Signature Resources 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 Signature Resources and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Resources and Canadian Imperial Bank, you can compare the effects of market volatilities on Signature Resources 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 Signature Resources with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Resources and Canadian Imperial.
Diversification Opportunities for Signature Resources and Canadian Imperial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Signature and Canadian is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Signature Resources 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 Signature Resources 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 Signature Resources 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 Signature Resources i.e., Signature Resources and Canadian Imperial go up and down completely randomly.
Pair Corralation between Signature Resources and Canadian Imperial
Assuming the 90 days horizon Signature Resources is expected to generate 15.81 times more return on investment than Canadian Imperial. However, Signature Resources is 15.81 times more volatile than Canadian Imperial Bank. It trades about 0.04 of its potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.1 per unit of risk. If you would invest 6.00 in Signature Resources on September 13, 2024 and sell it today you would lose (3.00) from holding Signature Resources or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Signature Resources vs. Canadian Imperial Bank
Performance |
| Timeline |
| Signature Resources |
| Canadian Imperial Bank |
Signature Resources and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signature Resources and Canadian Imperial
The main advantage of trading using opposite Signature Resources and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Resources 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.| Signature Resources vs. Arizona Sonoran Copper | Signature Resources vs. Marimaca Copper Corp | Signature Resources vs. World Copper | Signature Resources vs. QC Copper and |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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