Correlation Between CIBC Clean and CIBC Multifactor

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

By analyzing existing cross correlation between CIBC Clean Energy and CIBC Multifactor Equity, you can compare the effects of market volatilities on CIBC Clean and CIBC Multifactor 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 Clean with a short position of CIBC Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Clean and CIBC Multifactor.

Diversification Opportunities for CIBC Clean and CIBC Multifactor

0.0

Correlation Coefficient

CIBC Clean  CIBC Multifactor

Pay attention - limited upside

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

Pair Corralation between CIBC Clean and CIBC Multifactor

If you would invest (100.00) in CIBC Multifactor Equity on September 3, 2024 and sell it today you would earn a total of  100.00  from holding CIBC Multifactor Equity or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CIBC Clean Energy  vs.  CIBC Multifactor Equity

CIBC Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CIBC Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CIBC Clean is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CIBC Multifactor Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CIBC Multifactor Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CIBC Multifactor is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CIBC Clean and CIBC Multifactor

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

The idea behind CIBC Clean Energy and CIBC Multifactor Equity 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.