Correlation Between WT OFFSHORE and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both WT OFFSHORE and CDN 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 WT OFFSHORE and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT OFFSHORE and CDN IMPERIAL BANK, you can compare the effects of market volatilities on WT OFFSHORE and CDN 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 WT OFFSHORE with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT OFFSHORE and CDN IMPERIAL.
Diversification Opportunities for WT OFFSHORE and CDN IMPERIAL
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UWV and CDN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK and WT OFFSHORE 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 WT OFFSHORE are associated (or correlated) with CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of WT OFFSHORE i.e., WT OFFSHORE and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between WT OFFSHORE and CDN IMPERIAL
Assuming the 90 days trading horizon WT OFFSHORE is expected to generate 5.32 times more return on investment than CDN IMPERIAL. However, WT OFFSHORE is 5.32 times more volatile than CDN IMPERIAL BANK. It trades about 0.05 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about -0.06 per unit of risk. If you would invest 163.00 in WT OFFSHORE on October 14, 2024 and sell it today you would earn a total of 4.00 from holding WT OFFSHORE or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT OFFSHORE vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| WT OFFSHORE |
| CDN IMPERIAL BANK |
WT OFFSHORE and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT OFFSHORE and CDN IMPERIAL
The main advantage of trading using opposite WT OFFSHORE and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT OFFSHORE position performs unexpectedly, CDN 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| WT OFFSHORE vs. MeVis Medical Solutions | WT OFFSHORE vs. Keck Seng Investments | WT OFFSHORE vs. ONWARD MEDICAL BV | WT OFFSHORE vs. Chuangs China Investments |
| CDN IMPERIAL vs. JAPAN TOBACCO UNSPADR12 | CDN IMPERIAL vs. Wizz Air Holdings | CDN IMPERIAL vs. WT OFFSHORE | CDN IMPERIAL vs. CHINA SOUTHN AIR H |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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