Correlation Between CIBC Active and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both CIBC Active and Vanguard FTSE 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 CIBC Active and Vanguard FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIBC Active Investment and Vanguard FTSE Developed, you can compare the effects of market volatilities on CIBC Active and Vanguard FTSE 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 CIBC Active with a short position of Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Active and Vanguard FTSE.
Diversification Opportunities for CIBC Active and Vanguard FTSE
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CIBC and Vanguard is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Active Investment and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed and CIBC Active 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 CIBC Active Investment are associated (or correlated) with Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of CIBC Active i.e., CIBC Active and Vanguard FTSE go up and down completely randomly.
Pair Corralation between CIBC Active and Vanguard FTSE
Assuming the 90 days trading horizon CIBC Active is expected to generate 8.55 times less return on investment than Vanguard FTSE. But when comparing it to its historical volatility, CIBC Active Investment is 7.07 times less risky than Vanguard FTSE. It trades about 0.18 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,853 in Vanguard FTSE Developed on April 22, 2025 and sell it today you would earn a total of 361.00 from holding Vanguard FTSE Developed or generate 9.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
CIBC Active Investment vs. Vanguard FTSE Developed
Performance |
Timeline |
CIBC Active Investment |
Vanguard FTSE Developed |
CIBC Active and Vanguard FTSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CIBC Active and Vanguard FTSE
The main advantage of trading using opposite CIBC Active and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIBC Active position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.CIBC Active vs. Mackenzie Core Plus | CIBC Active vs. Mackenzie Core Plus | CIBC Active vs. Mackenzie Unconstrained Bond | CIBC Active vs. Mackenzie Canadian Aggregate |
Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard FTSE Emerging | Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard Dividend Appreciation |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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