Correlation Between IShares NASDAQ and CIBC Equity
Can any of the company-specific risk be diversified away by investing in both IShares NASDAQ and CIBC Equity 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 NASDAQ and CIBC Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares NASDAQ 100 and CIBC Equity Index, you can compare the effects of market volatilities on IShares NASDAQ and CIBC Equity 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 NASDAQ with a short position of CIBC Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares NASDAQ and CIBC Equity.
Diversification Opportunities for IShares NASDAQ and CIBC Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and CIBC is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares NASDAQ 100 and CIBC Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Equity Index and IShares NASDAQ 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 NASDAQ 100 are associated (or correlated) with CIBC Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Equity Index has no effect on the direction of IShares NASDAQ i.e., IShares NASDAQ and CIBC Equity go up and down completely randomly.
Pair Corralation between IShares NASDAQ and CIBC Equity
Assuming the 90 days trading horizon IShares NASDAQ is expected to generate 1.01 times less return on investment than CIBC Equity. In addition to that, IShares NASDAQ is 1.61 times more volatile than CIBC Equity Index. It trades about 0.17 of its total potential returns per unit of risk. CIBC Equity Index is currently generating about 0.27 per unit of volatility. If you would invest 3,299 in CIBC Equity Index on September 13, 2024 and sell it today you would earn a total of 114.00 from holding CIBC Equity Index or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares NASDAQ 100 vs. CIBC Equity Index
Performance |
| Timeline |
| iShares NASDAQ 100 |
| CIBC Equity Index |
IShares NASDAQ and CIBC Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares NASDAQ and CIBC Equity
The main advantage of trading using opposite IShares NASDAQ and CIBC Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares NASDAQ position performs unexpectedly, CIBC Equity 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 Equity will offset losses from the drop in CIBC Equity's long position.| IShares NASDAQ vs. iShares Core SP | IShares NASDAQ vs. iShares SPTSX Capped | IShares NASDAQ vs. BMO NASDAQ 100 | IShares NASDAQ vs. Vanguard SP 500 |
| CIBC Equity vs. CIBC Core Fixed | CIBC Equity vs. CIBC Canadian Equity | CIBC Equity vs. CIBC Clean Energy | CIBC Equity vs. CIBC Conservative Fixed |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |