Correlation Between Canadian Imperial and Nu Holdings
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Nu Holdings 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 Nu Holdings 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 Nu Holdings, you can compare the effects of market volatilities on Canadian Imperial and Nu Holdings 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 Nu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Nu Holdings.
Diversification Opportunities for Canadian Imperial and Nu Holdings
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Nu Holdings is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Nu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Holdings 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 Nu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Holdings has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Nu Holdings go up and down completely randomly.
Pair Corralation between Canadian Imperial and Nu Holdings
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 0.36 times more return on investment than Nu Holdings. However, Canadian Imperial Bank is 2.81 times less risky than Nu Holdings. It trades about 0.52 of its potential returns per unit of risk. Nu Holdings is currently generating about -0.11 per unit of risk. If you would invest 6,376 in Canadian Imperial Bank on March 9, 2025 and sell it today you would earn a total of 507.00 from holding Canadian Imperial Bank or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Nu Holdings
Performance |
| Timeline |
| Canadian Imperial Bank |
| Nu Holdings |
Canadian Imperial and Nu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Nu Holdings
The main advantage of trading using opposite Canadian Imperial and Nu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Nu Holdings 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 Nu Holdings will offset losses from the drop in Nu Holdings' long position.| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Toronto Dominion Bank | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Citigroup |
| Nu Holdings vs. Western Alliance Bancorporation | Nu Holdings vs. KeyCorp | Nu Holdings vs. Truist Financial Corp | Nu Holdings vs. Zions Bancorporation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |