Correlation Between IShares Core and CIBC Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Core and CIBC Canadian 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 IShares Core and CIBC Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and CIBC Canadian Equity, you can compare the effects of market volatilities on IShares Core and CIBC Canadian 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 IShares Core with a short position of CIBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and CIBC Canadian.
Diversification Opportunities for IShares Core and CIBC Canadian
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and CIBC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and CIBC Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Canadian Equity and IShares Core 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 iShares Core MSCI are associated (or correlated) with CIBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Canadian Equity has no effect on the direction of IShares Core i.e., IShares Core and CIBC Canadian go up and down completely randomly.
Pair Corralation between IShares Core and CIBC Canadian
Assuming the 90 days trading horizon IShares Core is expected to generate 1.34 times less return on investment than CIBC Canadian. But when comparing it to its historical volatility, iShares Core MSCI is 1.04 times less risky than CIBC Canadian. It trades about 0.07 of its potential returns per unit of risk. CIBC Canadian Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,019 in CIBC Canadian Equity on August 30, 2024 and sell it today you would earn a total of 725.00 from holding CIBC Canadian Equity or generate 35.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. CIBC Canadian Equity
Performance |
| Timeline |
| iShares Core MSCI |
| CIBC Canadian Equity |
IShares Core and CIBC Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and CIBC Canadian
The main advantage of trading using opposite IShares Core and CIBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, CIBC Canadian 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 Canadian will offset losses from the drop in CIBC Canadian's long position.| IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core SPTSX | IShares Core vs. Vanguard Total Market | IShares Core vs. iShares Core SP |
| CIBC Canadian vs. CIBC Core Fixed | CIBC Canadian vs. CIBC Clean Energy | CIBC Canadian vs. CIBC Conservative Fixed | CIBC Canadian vs. CIBC Qx Low |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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