Correlation Between CIBC Global and CIBC Premium

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

By analyzing existing cross correlation between CIBC Global Growth and CIBC Premium Cash, you can compare the effects of market volatilities on CIBC Global and CIBC Premium 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 Global with a short position of CIBC Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIBC Global and CIBC Premium.

Diversification Opportunities for CIBC Global and CIBC Premium

-0.47

Correlation Coefficient

CIBC Global  CIBC Premium

Very good diversification

The 3 months correlation between CIBC and CIBC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Global Growth and CIBC Premium Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Premium Cash and CIBC Global 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 Global Growth are associated (or correlated) with CIBC Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Premium Cash has no effect on the direction of CIBC Global i.e., CIBC Global and CIBC Premium go up and down completely randomly.

Pair Corralation between CIBC Global and CIBC Premium

Assuming the 90 days trading horizon CIBC Global Growth is expected to generate 36.33 times more return on investment than CIBC Premium. However, CIBC Global is 36.33 times more volatile than CIBC Premium Cash. It trades about 0.19 of its potential returns per unit of risk. CIBC Premium Cash is currently generating about 0.39 per unit of risk. If you would invest  2,710  in CIBC Global Growth on April 21, 2025 and sell it today you would earn a total of  315.00  from holding CIBC Global Growth or generate 11.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.44%
Values	Daily Returns

CIBC Global Growth  vs.  CIBC Premium Cash

CIBC Global Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIBC Global Growth are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CIBC Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CIBC Premium Cash

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CIBC Premium Cash are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CIBC Premium is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CIBC Global and CIBC Premium

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

The idea behind CIBC Global Growth and CIBC Premium Cash 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.