Correlation Between CIBC Sustainable and CIBC Multifactor

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

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

Diversification Opportunities for CIBC Sustainable and CIBC Multifactor

0.0

Correlation Coefficient

CIBC Sustainable  CIBC Multifactor

Pay attention - limited upside

The 3 months correlation between CIBC and CIBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Sustainable Balanced and CIBC Multifactor Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Multifactor Equity and CIBC Sustainable 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 Sustainable Balanced are associated (or correlated) with CIBC Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Multifactor Equity has no effect on the direction of CIBC Sustainable i.e., CIBC Sustainable and CIBC Multifactor go up and down completely randomly.

Pair Corralation between CIBC Sustainable and CIBC Multifactor

If you would invest  2,045  in CIBC Sustainable Balanced on September 3, 2024 and sell it today you would earn a total of  232.00  from holding CIBC Sustainable Balanced or generate 11.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CIBC Sustainable Balanced  vs.  CIBC Multifactor Equity

CIBC Sustainable Balanced

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIBC Sustainable Balanced are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, CIBC Sustainable may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CIBC Multifactor Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CIBC Sustainable and CIBC Multifactor

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

The idea behind CIBC Sustainable Balanced and CIBC Multifactor Equity 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.