Correlation Between Sporttotal and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Sporttotal 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 Sporttotal and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporttotal AG and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Sporttotal 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 Sporttotal with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and CDN IMPERIAL.
Diversification Opportunities for Sporttotal and CDN IMPERIAL
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sporttotal and CDN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG 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 Sporttotal 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 Sporttotal AG 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 Sporttotal i.e., Sporttotal and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Sporttotal and CDN IMPERIAL
Assuming the 90 days trading horizon Sporttotal is expected to generate 4.42 times less return on investment than CDN IMPERIAL. In addition to that, Sporttotal is 3.49 times more volatile than CDN IMPERIAL BANK. It trades about 0.01 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.1 per unit of volatility. If you would invest 3,470 in CDN IMPERIAL BANK on August 27, 2024 and sell it today you would earn a total of 2,798 from holding CDN IMPERIAL BANK or generate 80.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporttotal AG vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Sporttotal AG |
| CDN IMPERIAL BANK |
Sporttotal and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporttotal and CDN IMPERIAL
The main advantage of trading using opposite Sporttotal and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporttotal 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.The idea behind Sporttotal AG and CDN IMPERIAL BANK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Microsoft |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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