Correlation Between CIBC Flexible and Global X

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Can any of the company-specific risk be diversified away by investing in both CIBC Flexible and Global X 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 Flexible and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Flexible Yield and Global X Global, you can compare the effects of market volatilities on CIBC Flexible and Global X 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 Flexible with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Flexible and Global X.

Diversification Opportunities for CIBC Flexible and Global X

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between CIBC and Global is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Flexible Yield and Global X Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Global and CIBC Flexible 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 Flexible Yield are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Global has no effect on the direction of CIBC Flexible i.e., CIBC Flexible and Global X go up and down completely randomly.

Pair Corralation between CIBC Flexible and Global X

Assuming the 90 days trading horizon CIBC Flexible Yield is expected to generate 0.21 times more return on investment than Global X. However, CIBC Flexible Yield is 4.74 times less risky than Global X. It trades about 0.14 of its potential returns per unit of risk. Global X Global is currently generating about 0.0 per unit of risk. If you would invest  1,680  in CIBC Flexible Yield on October 9, 2024 and sell it today you would earn a total of  20.00  from holding CIBC Flexible Yield or generate 1.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CIBC Flexible Yield  vs.  Global X Global

 Performance 
       Timeline  
CIBC Flexible Yield 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days CIBC Flexible Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CIBC Flexible is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Global X Global 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global X Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CIBC Flexible and Global X Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CIBC Flexible and Global X

The main advantage of trading using opposite CIBC Flexible and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Flexible position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.
The idea behind CIBC Flexible Yield and Global X Global 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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