Correlation Between Canadian Imperial and Cortland Bancorp

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Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Cortland Bancorp 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 Cortland Bancorp 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 Cortland Bancorp, you can compare the effects of market volatilities on Canadian Imperial and Cortland Bancorp 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 Cortland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Cortland Bancorp.

Diversification Opportunities for Canadian Imperial and Cortland Bancorp

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Canadian Imperial and Cortland Bancorp

If you would invest  4,647  in Canadian Imperial Bank on December 29, 2023 and sell it today you would earn a total of  360.00  from holding Canadian Imperial Bank or generate 7.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Canadian Imperial Bank  vs.  Cortland Bancorp

 Performance 
       Timeline  
Canadian Imperial Bank 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Imperial Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, Canadian Imperial may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Cortland Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Cortland Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Cortland Bancorp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Canadian Imperial and Cortland Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Canadian Imperial and Cortland Bancorp

The main advantage of trading using opposite Canadian Imperial and Cortland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Cortland Bancorp 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 Cortland Bancorp will offset losses from the drop in Cortland Bancorp's long position.
The idea behind Canadian Imperial Bank and Cortland Bancorp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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