Correlation Between Cibc Atlas and American Funds

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

By analyzing existing cross correlation between Cibc Atlas International and American Funds Global, you can compare the effects of market volatilities on Cibc Atlas and American Funds 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 Atlas with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cibc Atlas and American Funds.

Diversification Opportunities for Cibc Atlas and American Funds

0.12

Correlation Coefficient

Cibc Atlas  American Funds

Average diversification

The 3 months correlation between Cibc and American is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cibc Atlas International and American Funds Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Global and Cibc Atlas 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 Atlas International are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Global has no effect on the direction of Cibc Atlas i.e., Cibc Atlas and American Funds go up and down completely randomly.

Pair Corralation between Cibc Atlas and American Funds

Assuming the 90 days horizon Cibc Atlas International is expected to generate 0.8 times more return on investment than American Funds. However, Cibc Atlas International is 1.24 times less risky than American Funds. It trades about 0.35 of its potential returns per unit of risk. American Funds Global is currently generating about 0.16 per unit of risk. If you would invest  1,295  in Cibc Atlas International on September 14, 2024 and sell it today you would earn a total of  45.00  from holding Cibc Atlas International or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cibc Atlas International  vs.  American Funds Global

Cibc Atlas International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cibc Atlas International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Cibc Atlas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Funds Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Funds Global are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, American Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cibc Atlas and American Funds

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

The idea behind Cibc Atlas International and American Funds Global 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.