Correlation Between Canadian Imperial and Invesco High
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Invesco High 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 Invesco High 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 Invesco High Yield, you can compare the effects of market volatilities on Canadian Imperial and Invesco High 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 Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Invesco High.
Diversification Opportunities for Canadian Imperial and Invesco High
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canadian and Invesco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Invesco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Yield 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 Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Yield has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Invesco High go up and down completely randomly.
Pair Corralation between Canadian Imperial and Invesco High
Assuming the 90 days horizon Canadian Imperial Bank is expected to under-perform the Invesco High. In addition to that, Canadian Imperial is 3.41 times more volatile than Invesco High Yield. It trades about -0.14 of its total potential returns per unit of risk. Invesco High Yield is currently generating about -0.25 per unit of volatility. If you would invest 349.00 in Invesco High Yield on January 20, 2024 and sell it today you would lose (4.00) from holding Invesco High Yield or give up 1.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Canadian Imperial Bank vs. Invesco High Yield
Performance |
Timeline |
Canadian Imperial Bank |
Invesco High Yield |
Canadian Imperial and Invesco High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Imperial and Invesco High
The main advantage of trading using opposite Canadian Imperial and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Invesco High 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 Invesco High will offset losses from the drop in Invesco High's long position.Canadian Imperial vs. Slate Grocery REIT | Canadian Imperial vs. Fennec Pharmaceuticals | Canadian Imperial vs. Roots Corp | Canadian Imperial vs. Frontera Energy Corp |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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