Correlation Between Canadian Imperial and Investors Title

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

By analyzing existing cross correlation between Canadian Imperial Bank and Investors Title, you can compare the effects of market volatilities on Canadian Imperial and Investors Title 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 Canadian Imperial with a short position of Investors Title. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Investors Title.

Diversification Opportunities for Canadian Imperial and Investors Title

-0.42

Correlation Coefficient

Canadian Imperial  Investors Title

Very good diversification

The 3 months correlation between Canadian and Investors is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Investors Title in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investors Title and Canadian Imperial 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 Canadian Imperial Bank are associated (or correlated) with Investors Title. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investors Title has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Investors Title go up and down completely randomly.

Pair Corralation between Canadian Imperial and Investors Title

Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to under-perform the Investors Title. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Imperial Bank is 1.39 times less risky than Investors Title. The stock trades about -0.13 of its potential returns per unit of risk. The Investors Title is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  23,945  in Investors Title on December 30, 2024 and sell it today you would earn a total of  317.00  from holding Investors Title or generate 1.32% return on investment over 90 days.

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

Canadian Imperial Bank  vs.  Investors Title

Canadian Imperial Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian Imperial Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Investors Title

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Investors Title are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Investors Title is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Canadian Imperial and Investors Title

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

The idea behind Canadian Imperial Bank and Investors Title 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 Correlations module to find global opportunities by holding instruments from different markets.