Correlation Between Canadian Imperial and Keck Seng
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Keck Seng 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 Keck Seng 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 Keck Seng Investments, you can compare the effects of market volatilities on Canadian Imperial and Keck Seng 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 Keck Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Keck Seng.
Diversification Opportunities for Canadian Imperial and Keck Seng
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Keck is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Keck Seng Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keck Seng Investments 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 Keck Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keck Seng Investments has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Keck Seng go up and down completely randomly.
Pair Corralation between Canadian Imperial and Keck Seng
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to under-perform the Keck Seng. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Imperial Bank is 5.75 times less risky than Keck Seng. The stock trades about -0.26 of its potential returns per unit of risk. The Keck Seng Investments is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Keck Seng Investments on January 20, 2024 and sell it today you would earn a total of 8.00 from holding Keck Seng Investments or generate 32.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Keck Seng Investments
Performance |
| Timeline |
| Canadian Imperial Bank |
| Keck Seng Investments |
Canadian Imperial and Keck Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Keck Seng
The main advantage of trading using opposite Canadian Imperial and Keck Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Keck Seng 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 Keck Seng will offset losses from the drop in Keck Seng's long position.| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Toronto Dominion Bank | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Citigroup |
| Keck Seng vs. Marriott International | Keck Seng vs. Hilton Worldwide Holdings | Keck Seng vs. InterContinental Hotels Group | Keck Seng vs. Choice Hotels International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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