Correlation Between Commerzbank and IShares Physical
Can any of the company-specific risk be diversified away by investing in both Commerzbank and IShares Physical 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 IShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and iShares Physical Silver, you can compare the effects of market volatilities on Commerzbank and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and IShares Physical.
Diversification Opportunities for Commerzbank and IShares Physical
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commerzbank and IShares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Commerzbank i.e., Commerzbank and IShares Physical go up and down completely randomly.
Pair Corralation between Commerzbank and IShares Physical
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 1.0 times more return on investment than IShares Physical. However, Commerzbank is 1.0 times more volatile than iShares Physical Silver. It trades about 0.73 of its potential returns per unit of risk. iShares Physical Silver is currently generating about 0.24 per unit of risk. If you would invest 1,550 in Commerzbank AG on November 3, 2024 and sell it today you would earn a total of 313.00 from holding Commerzbank AG or generate 20.19% 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. iShares Physical Silver
Performance |
| Timeline |
| Commerzbank AG |
| iShares Physical Silver |
Commerzbank and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and IShares Physical
The main advantage of trading using opposite Commerzbank and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| Commerzbank vs. Samsung Electronics Co | Commerzbank vs. Samsung Electronics Co | Commerzbank vs. Toyota Motor Corp | Commerzbank vs. Reliance Industries Ltd |
| IShares Physical vs. Cairn Homes PLC | IShares Physical vs. Geely Automobile Holdings | IShares Physical vs. Scandinavian Tobacco Group | IShares Physical vs. Synthomer 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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