Correlation Between Yihai International and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Yihai International 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 Yihai International and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yihai International Holding and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Yihai International 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 Yihai International with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yihai International and CDN IMPERIAL.
Diversification Opportunities for Yihai International and CDN IMPERIAL
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yihai and CDN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Yihai International Holding 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 Yihai International 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 Yihai International Holding 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 Yihai International i.e., Yihai International and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Yihai International and CDN IMPERIAL
Assuming the 90 days horizon Yihai International Holding is expected to under-perform the CDN IMPERIAL. In addition to that, Yihai International is 2.53 times more volatile than CDN IMPERIAL BANK. It trades about -0.31 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.02 per unit of volatility. If you would invest 6,090 in CDN IMPERIAL BANK on October 20, 2024 and sell it today you would earn a total of 14.00 from holding CDN IMPERIAL BANK or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yihai International Holding vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Yihai International |
| CDN IMPERIAL BANK |
Yihai International and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yihai International and CDN IMPERIAL
The main advantage of trading using opposite Yihai International and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yihai International 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.| Yihai International vs. CDN IMPERIAL BANK | Yihai International vs. Fukuyama Transporting Co | Yihai International vs. REVO INSURANCE SPA | Yihai International vs. BII Railway Transportation |
| CDN IMPERIAL vs. SOLSTAD OFFSHORE NK | CDN IMPERIAL vs. UPDATE SOFTWARE | CDN IMPERIAL vs. Electronic Arts | CDN IMPERIAL vs. Nucletron Electronic Aktiengesellschaft |
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 Stocks Directory module to find actively traded stocks across global markets.
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