Correlation Between Canadian Imperial and Exxon
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Exxon 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 Canadian Imperial and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Imperial Bank and EXXON MOBIL CDR, you can compare the effects of market volatilities on Canadian Imperial and Exxon 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 Canadian Imperial with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Exxon.
Diversification Opportunities for Canadian Imperial and Exxon
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Exxon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and EXXON MOBIL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL CDR and Canadian Imperial 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 Canadian Imperial Bank are associated (or correlated) with Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXXON MOBIL CDR has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Exxon go up and down completely randomly.
Pair Corralation between Canadian Imperial and Exxon
Assuming the 90 days trading horizon Canadian Imperial Bank is expected to generate 0.19 times more return on investment than Exxon. However, Canadian Imperial Bank is 5.13 times less risky than Exxon. It trades about 0.22 of its potential returns per unit of risk. EXXON MOBIL CDR is currently generating about 0.02 per unit of risk. If you would invest 2,457 in Canadian Imperial Bank on April 25, 2025 and sell it today you would earn a total of 99.00 from holding Canadian Imperial Bank or generate 4.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Imperial Bank vs. EXXON MOBIL CDR
Performance |
Timeline |
Canadian Imperial Bank |
EXXON MOBIL CDR |
Canadian Imperial and Exxon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Imperial and Exxon
The main advantage of trading using opposite Canadian Imperial and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.Canadian Imperial vs. Elcora Advanced Materials | Canadian Imperial vs. Pollard Banknote Limited | Canadian Imperial vs. Laurentian Bank | Canadian Imperial vs. Contagious Gaming |
Exxon vs. Wall Financial | Exxon vs. E L Financial Corp | Exxon vs. North American Construction | Exxon vs. Cogeco Communications |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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