Correlation Between CI Canada and CIBC Qx
Can any of the company-specific risk be diversified away by investing in both CI Canada 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 CI Canada and CIBC Qx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canada Lifeco and CIBC Qx Low, you can compare the effects of market volatilities on CI Canada 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 CI Canada with a short position of CIBC Qx. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and CIBC Qx.
Diversification Opportunities for CI Canada and CIBC Qx
Average diversification
The 3 months correlation between FLI and CIBC is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Lifeco and CIBC Qx Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Qx Low and CI Canada 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 CI Canada Lifeco 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 Low has no effect on the direction of CI Canada i.e., CI Canada and CIBC Qx go up and down completely randomly.
Pair Corralation between CI Canada and CIBC Qx
Assuming the 90 days trading horizon CI Canada Lifeco is expected to generate 0.4 times more return on investment than CIBC Qx. However, CI Canada Lifeco is 2.51 times less risky than CIBC Qx. It trades about 0.01 of its potential returns per unit of risk. CIBC Qx Low is currently generating about -0.09 per unit of risk. If you would invest 1,171 in CI Canada Lifeco on December 1, 2024 and sell it today you would earn a total of 5.00 from holding CI Canada Lifeco or generate 0.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
CI Canada Lifeco vs. CIBC Qx Low
Performance |
Timeline |
CI Canada Lifeco |
CIBC Qx Low |
CI Canada and CIBC Qx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CI Canada and CIBC Qx
The main advantage of trading using opposite CI Canada and CIBC Qx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada 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.CI Canada vs. First Asset Energy | CI Canada vs. CI Gold Giants | CI Canada vs. Harvest Equal Weight | CI Canada vs. First Asset Tech |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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