Correlation Between CIBC Clean and CIBC Qx

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

By analyzing existing cross correlation between CIBC Clean Energy and CIBC Qx International, you can compare the effects of market volatilities on CIBC Clean 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 CIBC Clean with a short position of CIBC Qx. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Clean and CIBC Qx.

Diversification Opportunities for CIBC Clean and CIBC Qx

-0.79

Correlation Coefficient

CIBC Clean  CIBC Qx

Pay attention - limited upside

The 3 months correlation between CIBC and CIBC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Clean Energy and CIBC Qx International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Qx International and CIBC Clean 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 CIBC Clean Energy 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 International has no effect on the direction of CIBC Clean i.e., CIBC Clean and CIBC Qx go up and down completely randomly.

Pair Corralation between CIBC Clean and CIBC Qx

Assuming the 90 days trading horizon CIBC Clean Energy is expected to under-perform the CIBC Qx. But the etf apears to be less risky and, when comparing its historical volatility, CIBC Clean Energy is 1.23 times less risky than CIBC Qx. The etf trades about -0.09 of its potential returns per unit of risk. The CIBC Qx International is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,097  in CIBC Qx International on December 30, 2024 and sell it today you would lose (70.00) from holding CIBC Qx International or give up 3.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

CIBC Clean Energy  vs.  CIBC Qx International

CIBC Clean Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIBC Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

CIBC Qx International

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIBC Qx International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CIBC Qx is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CIBC Clean and CIBC Qx

The main advantage of trading using opposite CIBC Clean and CIBC Qx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Clean 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.

The idea behind CIBC Clean Energy and CIBC Qx International 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.