Correlation Between Vodafone Group and Canadian Imperial

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

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

Diversification Opportunities for Vodafone Group and Canadian Imperial

0.94

Correlation Coefficient

Vodafone Group  Canadian Imperial

Almost no diversification

The 3 months correlation between Vodafone and Canadian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC 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 Vodafone Group 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 Vodafone Group PLC 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 Vodafone Group i.e., Vodafone Group and Canadian Imperial go up and down completely randomly.

Pair Corralation between Vodafone Group and Canadian Imperial

Considering the 90-day investment horizon Vodafone Group PLC is expected to generate 2.25 times more return on investment than Canadian Imperial. However, Vodafone Group is 2.25 times more volatile than Canadian Imperial Bank. It trades about 0.16 of its potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.29 per unit of risk. If you would invest  943.00  in Vodafone Group PLC on May 6, 2025 and sell it today you would earn a total of  157.50  from holding Vodafone Group PLC or generate 16.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Vodafone Group PLC  vs.  Canadian Imperial Bank

Vodafone Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vodafone Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Vodafone Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 22 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Canadian Imperial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vodafone Group and Canadian Imperial

The main advantage of trading using opposite Vodafone Group and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group 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 Vodafone Group PLC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.