Correlation Between Canadian Imperial and Delaware Investments

Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Delaware Investments 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 Delaware Investments 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 Delaware Investments Florida, you can compare the effects of market volatilities on Canadian Imperial and Delaware Investments 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 Delaware Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Delaware Investments.

Diversification Opportunities for Canadian Imperial and Delaware Investments

-0.66

Correlation Coefficient

Canadian Imperial  Delaware Investments

Excellent diversification

The 3 months correlation between Canadian and Delaware is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Delaware Investments Florida in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Investments 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 Delaware Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Investments has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Delaware Investments go up and down completely randomly.

Pair Corralation between Canadian Imperial and Delaware Investments

Allowing for the 90-day total investment horizon Canadian Imperial is expected to generate 3.48 times less return on investment than Delaware Investments. But when comparing it to its historical volatility, Canadian Imperial Bank is 1.01 times less risky than Delaware Investments. It trades about 0.05 of its potential returns per unit of risk. Delaware Investments Florida is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,059  in Delaware Investments Florida on September 5, 2024 and sell it today you would earn a total of  26.00  from holding Delaware Investments Florida or generate 2.46% 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.  Delaware Investments Florida

Canadian Imperial Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Imperial Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Canadian Imperial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Delaware Investments

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Investments Florida are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Delaware Investments is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Canadian Imperial and Delaware Investments

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

The idea behind Canadian Imperial Bank and Delaware Investments Florida 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.