Correlation Between Canadian Imperial and Baselode Energy
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Baselode Energy 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 Baselode Energy 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 Baselode Energy Corp, you can compare the effects of market volatilities on Canadian Imperial and Baselode Energy 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 Baselode Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Baselode Energy.
Diversification Opportunities for Canadian Imperial and Baselode Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canadian and Baselode is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Baselode Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baselode Energy 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 Baselode Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baselode Energy Corp has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Baselode Energy go up and down completely randomly.
Pair Corralation between Canadian Imperial and Baselode Energy
Assuming the 90 days trading horizon Canadian Imperial Bank is expected to generate 0.05 times more return on investment than Baselode Energy. However, Canadian Imperial Bank is 20.86 times less risky than Baselode Energy. It trades about 0.19 of its potential returns per unit of risk. Baselode Energy Corp is currently generating about -0.08 per unit of risk. If you would invest 2,463 in Canadian Imperial Bank on September 25, 2024 and sell it today you would earn a total of 84.00 from holding Canadian Imperial Bank or generate 3.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Imperial Bank vs. Baselode Energy Corp
Performance |
Timeline |
Canadian Imperial Bank |
Baselode Energy Corp |
Canadian Imperial and Baselode Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Imperial and Baselode Energy
The main advantage of trading using opposite Canadian Imperial and Baselode Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Baselode Energy 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 Baselode Energy will offset losses from the drop in Baselode Energy's long position.Canadian Imperial vs. Canaf Investments | Canadian Imperial vs. HOME DEPOT CDR | Canadian Imperial vs. Leons Furniture Limited | Canadian Imperial vs. Vizsla Silver 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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