Correlation Between Commerzbank and Central Asia
Can any of the company-specific risk be diversified away by investing in both Commerzbank and Central Asia 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 Central Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and Central Asia Metals, you can compare the effects of market volatilities on Commerzbank and Central Asia 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 Central Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Central Asia.
Diversification Opportunities for Commerzbank and Central Asia
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commerzbank and Central is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and Central Asia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Asia Metals 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 Central Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Asia Metals has no effect on the direction of Commerzbank i.e., Commerzbank and Central Asia go up and down completely randomly.
Pair Corralation between Commerzbank and Central Asia
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 1.34 times more return on investment than Central Asia. However, Commerzbank is 1.34 times more volatile than Central Asia Metals. It trades about 0.14 of its potential returns per unit of risk. Central Asia Metals is currently generating about -0.06 per unit of risk. If you would invest 1,346 in Commerzbank AG on November 2, 2024 and sell it today you would earn a total of 483.00 from holding Commerzbank AG or generate 35.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG vs. Central Asia Metals
Performance |
| Timeline |
| Commerzbank AG |
| Central Asia Metals |
Commerzbank and Central Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Central Asia
The main advantage of trading using opposite Commerzbank and Central Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, Central Asia 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 Central Asia will offset losses from the drop in Central Asia's long position.| Commerzbank vs. Cornish Metals | Commerzbank vs. MoneysupermarketCom Group PLC | Commerzbank vs. CleanTech Lithium plc | Commerzbank vs. Fulcrum Metals PLC |
| Central Asia vs. Givaudan SA | Central Asia vs. Antofagasta PLC | Central Asia vs. Ferrexpo PLC | Central Asia vs. Atalaya Mining |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |