Correlation Between Canadian Imperial and Hercules Metals
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Hercules Metals 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 Hercules Metals 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 Hercules Metals Corp, you can compare the effects of market volatilities on Canadian Imperial and Hercules Metals 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 Hercules Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Hercules Metals.
Diversification Opportunities for Canadian Imperial and Hercules Metals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Hercules is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Hercules Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Metals Corp 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 Hercules Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Metals Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Hercules Metals go up and down completely randomly.
Pair Corralation between Canadian Imperial and Hercules Metals
Assuming the 90 days trading horizon Canadian Imperial Bank is expected to generate 0.05 times more return on investment than Hercules Metals. However, Canadian Imperial Bank is 18.8 times less risky than Hercules Metals. It trades about 0.2 of its potential returns per unit of risk. Hercules Metals Corp is currently generating about 0.0 per unit of risk. If you would invest 2,463 in Canadian Imperial Bank on September 23, 2024 and sell it today you would earn a total of 87.00 from holding Canadian Imperial Bank or generate 3.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Imperial Bank vs. Hercules Metals Corp
Performance |
Timeline |
Canadian Imperial Bank |
Hercules Metals Corp |
Canadian Imperial and Hercules Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Imperial and Hercules Metals
The main advantage of trading using opposite Canadian Imperial and Hercules Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Hercules Metals 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 Hercules Metals will offset losses from the drop in Hercules Metals' long position.Canadian Imperial vs. Enbridge Pref 5 | Canadian Imperial vs. Enbridge Pref 11 | Canadian Imperial vs. Enbridge Pref L | Canadian Imperial vs. E Split Corp |
Hercules Metals vs. CI Financial Corp | Hercules Metals vs. Laurentian Bank | Hercules Metals vs. Canadian Imperial Bank | Hercules Metals vs. Talon Metals Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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