Correlation Between Commerzbank and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both Commerzbank and CAP LEASE 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 CAP LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and CAP LEASE AVIATION, you can compare the effects of market volatilities on Commerzbank and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and CAP LEASE.
Diversification Opportunities for Commerzbank and CAP LEASE
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commerzbank and CAP is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Commerzbank i.e., Commerzbank and CAP LEASE go up and down completely randomly.
Pair Corralation between Commerzbank and CAP LEASE
If you would invest 1,583 in Commerzbank AG on November 7, 2024 and sell it today you would earn a total of 253.00 from holding Commerzbank AG or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG vs. CAP LEASE AVIATION
Performance |
| Timeline |
| Commerzbank AG |
| CAP LEASE AVIATION |
Commerzbank and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and CAP LEASE
The main advantage of trading using opposite Commerzbank and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.| Commerzbank vs. Bigblu Broadband PLC | Commerzbank vs. Fidelity National Information | Commerzbank vs. Broadridge Financial Solutions | Commerzbank vs. Norman Broadbent Plc |
| CAP LEASE vs. Sabien Technology Group | CAP LEASE vs. Alfa Financial Software | CAP LEASE vs. Aptitude Software Group | CAP LEASE vs. MediaZest plc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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