Correlation Between Credit Suisse and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both Credit Suisse 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 Credit Suisse and Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Group and Canadian Imperial Bank, you can compare the effects of market volatilities on Credit Suisse 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 Credit Suisse with a short position of Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Canadian Imperial.
Diversification Opportunities for Credit Suisse and Canadian Imperial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Credit and Canadian is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Group 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 Credit Suisse 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 Credit Suisse Group 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 Credit Suisse i.e., Credit Suisse and Canadian Imperial go up and down completely randomly.
Pair Corralation between Credit Suisse and Canadian Imperial
Allowing for the 90-day total investment horizon Credit Suisse Group is expected to under-perform the Canadian Imperial. In addition to that, Credit Suisse is 3.3 times more volatile than Canadian Imperial Bank. It trades about -0.12 of its total potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.01 per unit of volatility. If you would invest 4,858 in Canadian Imperial Bank on January 25, 2024 and sell it today you would lose (56.00) from holding Canadian Imperial Bank or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.48% |
| Values | Daily Returns |
Credit Suisse Group vs. Canadian Imperial Bank
Performance |
| Timeline |
| Credit Suisse Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Canadian Imperial Bank |
Credit Suisse and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Canadian Imperial
The main advantage of trading using opposite Credit Suisse and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse 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.| Credit Suisse vs. Barclays PLC ADR | Credit Suisse vs. HSBC Holdings PLC | Credit Suisse vs. ING Group NV | Credit Suisse vs. Citigroup |
| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Toronto Dominion Bank | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Citigroup |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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