Correlation Between GRUPO ECOENER and CDN IMPERIAL

Can any of the company-specific risk be diversified away by investing in both GRUPO ECOENER 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 GRUPO ECOENER and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRUPO ECOENER EO and CDN IMPERIAL BANK, you can compare the effects of market volatilities on GRUPO ECOENER 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 GRUPO ECOENER with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO ECOENER and CDN IMPERIAL.

Diversification Opportunities for GRUPO ECOENER and CDN IMPERIAL

0.75

Correlation Coefficient

GRUPO ECOENER  CDN IMPERIAL

Poor diversification

The 3 months correlation between GRUPO and CDN is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO ECOENER EO 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 GRUPO ECOENER 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 GRUPO ECOENER EO 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 GRUPO ECOENER i.e., GRUPO ECOENER and CDN IMPERIAL go up and down completely randomly.

Pair Corralation between GRUPO ECOENER and CDN IMPERIAL

Assuming the 90 days horizon GRUPO ECOENER is expected to generate 1.49 times less return on investment than CDN IMPERIAL. In addition to that, GRUPO ECOENER is 1.91 times more volatile than CDN IMPERIAL BANK. It trades about 0.08 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.22 per unit of volatility. If you would invest  5,372  in CDN IMPERIAL BANK on October 5, 2024 and sell it today you would earn a total of  761.00  from holding CDN IMPERIAL BANK or generate 14.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GRUPO ECOENER EO  vs.  CDN IMPERIAL BANK

GRUPO ECOENER EO

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days GRUPO ECOENER EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, GRUPO ECOENER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CDN IMPERIAL BANK

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days CDN IMPERIAL BANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain forward indicators, CDN IMPERIAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRUPO ECOENER and CDN IMPERIAL

The main advantage of trading using opposite GRUPO ECOENER and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO ECOENER 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.

The idea behind GRUPO ECOENER EO and CDN IMPERIAL BANK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.