Correlation Between Fidelity Dividend and CIBC International

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

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

Diversification Opportunities for Fidelity Dividend and CIBC International

-0.47

Correlation Coefficient

Fidelity Dividend  CIBC International

Very good diversification

The 3 months correlation between Fidelity and CIBC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dividend for and CIBC International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC International Equity and Fidelity Dividend 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 Fidelity Dividend for are associated (or correlated) with CIBC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC International Equity has no effect on the direction of Fidelity Dividend i.e., Fidelity Dividend and CIBC International go up and down completely randomly.

Pair Corralation between Fidelity Dividend and CIBC International

Assuming the 90 days trading horizon Fidelity Dividend for is expected to generate 0.93 times more return on investment than CIBC International. However, Fidelity Dividend for is 1.08 times less risky than CIBC International. It trades about 0.22 of its potential returns per unit of risk. CIBC International Equity is currently generating about -0.03 per unit of risk. If you would invest  4,084  in Fidelity Dividend for on September 3, 2024 and sell it today you would earn a total of  421.00  from holding Fidelity Dividend for or generate 10.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fidelity Dividend for  vs.  CIBC International Equity

Fidelity Dividend for

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dividend for are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CIBC International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fidelity Dividend and CIBC International

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

The idea behind Fidelity Dividend for and CIBC International 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.