Correlation Between Income Fund and Cibc Atlas

Can any of the company-specific risk be diversified away by investing in both Income Fund and Cibc Atlas 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 Income Fund and Cibc Atlas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Income Fund Of and Cibc Atlas All, you can compare the effects of market volatilities on Income Fund and Cibc Atlas 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 Income Fund with a short position of Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and Cibc Atlas.

Diversification Opportunities for Income Fund and Cibc Atlas

0.91

Correlation Coefficient

Income Fund  Cibc Atlas

Almost no diversification

The 3 months correlation between Income and Cibc is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and Cibc Atlas All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas All and Income Fund 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 Income Fund Of are associated (or correlated) with Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas All has no effect on the direction of Income Fund i.e., Income Fund and Cibc Atlas go up and down completely randomly.

Pair Corralation between Income Fund and Cibc Atlas

Assuming the 90 days horizon Income Fund is expected to generate 2.45 times less return on investment than Cibc Atlas. But when comparing it to its historical volatility, Income Fund Of is 2.79 times less risky than Cibc Atlas. It trades about 0.15 of its potential returns per unit of risk. Cibc Atlas All is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4,108  in Cibc Atlas All on September 2, 2024 and sell it today you would earn a total of  385.00  from holding Cibc Atlas All or generate 9.37% return on investment over 90 days.

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

Income Fund Of  vs.  Cibc Atlas All

Income Fund

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Income Fund Of are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Income Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cibc Atlas All

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cibc Atlas All are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cibc Atlas may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Income Fund and Cibc Atlas

The main advantage of trading using opposite Income Fund and Cibc Atlas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund position performs unexpectedly, Cibc Atlas 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 Atlas will offset losses from the drop in Cibc Atlas' long position.

The idea behind Income Fund Of and Cibc Atlas All 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.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.