Correlation Between IShares Core and CIBC Qx
Can any of the company-specific risk be diversified away by investing in both IShares Core and CIBC Qx 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 Qx 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 Qx Low, you can compare the effects of market volatilities on IShares Core and CIBC Qx 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 Qx. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and CIBC Qx.
Diversification Opportunities for IShares Core and CIBC Qx
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and CIBC is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and CIBC Qx Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Qx Low 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 Qx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Qx Low has no effect on the direction of IShares Core i.e., IShares Core and CIBC Qx go up and down completely randomly.
Pair Corralation between IShares Core and CIBC Qx
Assuming the 90 days trading horizon iShares Core SP is expected to generate 1.14 times more return on investment than CIBC Qx. However, IShares Core is 1.14 times more volatile than CIBC Qx Low. It trades about 0.36 of its potential returns per unit of risk. CIBC Qx Low is currently generating about 0.27 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 | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. CIBC Qx Low
Performance |
| Timeline |
| iShares Core SP |
| CIBC Qx Low |
IShares Core and CIBC Qx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and CIBC Qx
The main advantage of trading using opposite IShares Core and CIBC Qx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, CIBC Qx 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 Qx will offset losses from the drop in CIBC Qx'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 Qx vs. Brompton Global Dividend | CIBC Qx vs. Global Healthcare Income | CIBC Qx vs. Tech Leaders Income | CIBC Qx 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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