Correlation Between Commerzbank and Sparebank
Can any of the company-specific risk be diversified away by investing in both Commerzbank and Sparebank 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 Commerzbank and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and Sparebank 1 SR, you can compare the effects of market volatilities on Commerzbank and Sparebank 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 Commerzbank with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Sparebank.
Diversification Opportunities for Commerzbank and Sparebank
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commerzbank and Sparebank is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Commerzbank 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 Commerzbank AG are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Commerzbank i.e., Commerzbank and Sparebank go up and down completely randomly.
Pair Corralation between Commerzbank and Sparebank
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 1.56 times more return on investment than Sparebank. However, Commerzbank is 1.56 times more volatile than Sparebank 1 SR. It trades about 0.7 of its potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.45 per unit of risk. If you would invest 1,510 in Commerzbank AG on October 25, 2024 and sell it today you would earn a total of 276.00 from holding Commerzbank AG or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG vs. Sparebank 1 SR
Performance |
| Timeline |
| Commerzbank AG |
| Sparebank 1 SR |
Commerzbank and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Sparebank
The main advantage of trading using opposite Commerzbank and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank's long position.| Commerzbank vs. PPHE Hotel Group | Commerzbank vs. Invesco Physical Silver | Commerzbank vs. Edita Food Industries | Commerzbank vs. Hecla Mining Co |
| Sparebank vs. Toyota Motor Corp | Sparebank vs. SoftBank Group Corp | Sparebank vs. OTP Bank Nyrt | Sparebank vs. ONEOK Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |