Correlation Between IShares Core and CIBC Flexible
Can any of the company-specific risk be diversified away by investing in both IShares Core and CIBC Flexible 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 Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and CIBC Flexible Yield, you can compare the effects of market volatilities on IShares Core and CIBC Flexible 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 Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and CIBC Flexible.
Diversification Opportunities for IShares Core and CIBC Flexible
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and CIBC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and CIBC Flexible Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Flexible Yield 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 SP are associated (or correlated) with CIBC Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Flexible Yield has no effect on the direction of IShares Core i.e., IShares Core and CIBC Flexible go up and down completely randomly.
Pair Corralation between IShares Core and CIBC Flexible
Assuming the 90 days trading horizon iShares Core SP is expected to generate 3.8 times more return on investment than CIBC Flexible. However, IShares Core is 3.8 times more volatile than CIBC Flexible Yield. It trades about 0.36 of its potential returns per unit of risk. CIBC Flexible Yield is currently generating about 0.23 per unit of risk. If you would invest 5,951 in iShares Core SP on September 1, 2024 and sell it today you would earn a total of 354.00 from holding iShares Core SP or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core SP vs. CIBC Flexible Yield
Performance |
| Timeline |
| iShares Core SP |
| CIBC Flexible Yield |
IShares Core and CIBC Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and CIBC Flexible
The main advantage of trading using opposite IShares Core and CIBC Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, CIBC Flexible 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 Flexible will offset losses from the drop in CIBC Flexible's long position.| IShares Core vs. iShares SPTSX 60 | IShares Core vs. iShares MSCI EAFE | IShares Core vs. iShares Core SPTSX | IShares Core vs. iShares SPTSX Capped |
| CIBC Flexible vs. Brompton Global Dividend | CIBC Flexible vs. Global Healthcare Income | CIBC Flexible vs. Tech Leaders Income | CIBC Flexible vs. Brompton North American |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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