Correlation Between BetaPro SPTSX and CIBC International

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

By analyzing existing cross correlation between BetaPro SPTSX Capped and CIBC International Equity, you can compare the effects of market volatilities on BetaPro SPTSX and CIBC International 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 BetaPro SPTSX with a short position of CIBC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and CIBC International.

Diversification Opportunities for BetaPro SPTSX and CIBC International

-0.38

Correlation Coefficient

BetaPro SPTSX  CIBC International

Very good diversification

The 3 months correlation between BetaPro and CIBC is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX Capped and CIBC International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC International Equity and BetaPro SPTSX 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 BetaPro SPTSX Capped are associated (or correlated) with CIBC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC International Equity has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and CIBC International go up and down completely randomly.

Pair Corralation between BetaPro SPTSX and CIBC International

Assuming the 90 days trading horizon BetaPro SPTSX Capped is expected to under-perform the CIBC International. In addition to that, BetaPro SPTSX is 3.05 times more volatile than CIBC International Equity. It trades about -0.15 of its total potential returns per unit of risk. CIBC International Equity is currently generating about 0.14 per unit of volatility. If you would invest  2,186  in CIBC International Equity on April 21, 2025 and sell it today you would earn a total of  173.00  from holding CIBC International Equity or generate 7.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

BetaPro SPTSX Capped  vs.  CIBC International Equity

BetaPro SPTSX Capped

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro SPTSX Capped has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

CIBC International Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIBC International Equity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CIBC International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BetaPro SPTSX and CIBC International

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

The idea behind BetaPro SPTSX Capped and CIBC International Equity 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.