Correlation Between Canadian Imperial and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Credit Suisse 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 Credit Suisse 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 Credit Suisse Group, you can compare the effects of market volatilities on Canadian Imperial and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Credit Suisse.
Diversification Opportunities for Canadian Imperial and Credit Suisse
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canadian and Credit is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Credit Suisse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Group 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Group has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Credit Suisse go up and down completely randomly.
Pair Corralation between Canadian Imperial and Credit Suisse
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 0.57 times more return on investment than Credit Suisse. However, Canadian Imperial Bank is 1.74 times less risky than Credit Suisse. It trades about 0.07 of its potential returns per unit of risk. Credit Suisse Group is currently generating about 0.02 per unit of risk. If you would invest 4,108 in Canadian Imperial Bank on December 29, 2023 and sell it today you would earn a total of 899.00 from holding Canadian Imperial Bank or generate 21.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 20.56% |
Values | Daily Returns |
Canadian Imperial Bank vs. Credit Suisse Group
Performance |
Timeline |
Canadian Imperial Bank |
Credit Suisse Group |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Canadian Imperial and Credit Suisse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Imperial and Credit Suisse
The main advantage of trading using opposite Canadian Imperial and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.Canadian Imperial vs. Bank Of America | Canadian Imperial vs. Deckers Outdoor | Canadian Imperial vs. Intuitive Machines | Canadian Imperial vs. Liberty Interactive LLC |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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