Correlation Between Advantage Oil and Canadian Imperial

Can any of the company-specific risk be diversified away by investing in both Advantage Oil and Canadian Imperial 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 Advantage Oil and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advantage Oil Gas and Canadian Imperial Bank, you can compare the effects of market volatilities on Advantage Oil and Canadian Imperial 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 Advantage Oil with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Oil and Canadian Imperial.

Diversification Opportunities for Advantage Oil and Canadian Imperial

0.37

Correlation Coefficient

Advantage Oil  Canadian Imperial

Weak diversification

The 3 months correlation between Advantage and Canadian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Oil Gas and Canadian Imperial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Imperial Bank and Advantage Oil 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 Advantage Oil Gas are associated (or correlated) with Canadian Imperial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Imperial Bank has no effect on the direction of Advantage Oil i.e., Advantage Oil and Canadian Imperial go up and down completely randomly.

Pair Corralation between Advantage Oil and Canadian Imperial

Assuming the 90 days trading horizon Advantage Oil is expected to generate 1.32 times less return on investment than Canadian Imperial. In addition to that, Advantage Oil is 2.99 times more volatile than Canadian Imperial Bank. It trades about 0.08 of its total potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.33 per unit of volatility. If you would invest  8,718  in Canadian Imperial Bank on May 4, 2025 and sell it today you would earn a total of  1,189  from holding Canadian Imperial Bank or generate 13.64% return on investment over 90 days.

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

Advantage Oil Gas  vs.  Canadian Imperial Bank

Advantage Oil Gas

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Oil Gas are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Advantage Oil may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Canadian Imperial Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Imperial Bank are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Canadian Imperial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Oil and Canadian Imperial

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

The idea behind Advantage Oil Gas and Canadian Imperial Bank 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.