Correlation Between Wizz Air and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and CDN IMPERIAL.
Diversification Opportunities for Wizz Air and CDN IMPERIAL
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wizz and CDN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings 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 Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Wizz Air and CDN IMPERIAL
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the CDN IMPERIAL. In addition to that, Wizz Air is 3.43 times more volatile than CDN IMPERIAL BANK. It trades about -0.36 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about -0.06 per unit of volatility. If you would invest 6,159 in CDN IMPERIAL BANK on October 14, 2024 and sell it today you would lose (69.00) from holding CDN IMPERIAL BANK or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Wizz Air Holdings |
| CDN IMPERIAL BANK |
Wizz Air and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and CDN IMPERIAL
The main advantage of trading using opposite Wizz Air and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. INTERSHOP Communications Aktiengesellschaft | Wizz Air vs. ARDAGH METAL PACDL 0001 | Wizz Air vs. Jacquet Metal Service | Wizz Air vs. Yuexiu Transport Infrastructure |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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