Correlation Between Small Cap and Cibc Atlas

Can any of the company-specific risk be diversified away by investing in both Small Cap and Cibc Atlas 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 Small Cap and Cibc Atlas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Small Cap Value Fund and Cibc Atlas All, you can compare the effects of market volatilities on Small Cap and Cibc Atlas 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 Small Cap with a short position of Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Cibc Atlas.

Diversification Opportunities for Small Cap and Cibc Atlas

0.73

Correlation Coefficient

Small Cap  Cibc Atlas

Poor diversification

The 3 months correlation between Small and Cibc is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value Fund and Cibc Atlas All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas All and Small Cap 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 Small Cap Value Fund are associated (or correlated) with Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas All has no effect on the direction of Small Cap i.e., Small Cap and Cibc Atlas go up and down completely randomly.

Pair Corralation between Small Cap and Cibc Atlas

Assuming the 90 days horizon Small Cap Value Fund is expected to generate 1.43 times more return on investment than Cibc Atlas. However, Small Cap is 1.43 times more volatile than Cibc Atlas All. It trades about 0.15 of its potential returns per unit of risk. Cibc Atlas All is currently generating about 0.12 per unit of risk. If you would invest  3,360  in Small Cap Value Fund on May 22, 2025 and sell it today you would earn a total of  359.00  from holding Small Cap Value Fund or generate 10.68% return on investment over 90 days.

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

Small Cap Value Fund  vs.  Cibc Atlas All

Small Cap Value

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Value Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Cibc Atlas All

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cibc Atlas All are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cibc Atlas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Small Cap and Cibc Atlas

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

The idea behind Small Cap Value Fund and Cibc Atlas All 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .