Correlation Between MOVIE GAMES and COMMONWBK AUSTRSPADRS
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and COMMONWBK AUSTRSPADRS 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 MOVIE GAMES and COMMONWBK AUSTRSPADRS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and COMMONWBK AUSTRSPADRS, you can compare the effects of market volatilities on MOVIE GAMES and COMMONWBK AUSTRSPADRS 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 MOVIE GAMES with a short position of COMMONWBK AUSTRSPADRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and COMMONWBK AUSTRSPADRS.
Diversification Opportunities for MOVIE GAMES and COMMONWBK AUSTRSPADRS
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MOVIE and COMMONWBK is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and COMMONWBK AUSTRSPADRS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMONWBK AUSTRSPADRS and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with COMMONWBK AUSTRSPADRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMONWBK AUSTRSPADRS has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and COMMONWBK AUSTRSPADRS go up and down completely randomly.
Pair Corralation between MOVIE GAMES and COMMONWBK AUSTRSPADRS
Assuming the 90 days horizon MOVIE GAMES SA is expected to under-perform the COMMONWBK AUSTRSPADRS. In addition to that, MOVIE GAMES is 1.61 times more volatile than COMMONWBK AUSTRSPADRS. It trades about -0.18 of its total potential returns per unit of risk. COMMONWBK AUSTRSPADRS is currently generating about 0.18 per unit of volatility. If you would invest 9,100 in COMMONWBK AUSTRSPADRS on September 12, 2024 and sell it today you would earn a total of 400.00 from holding COMMONWBK AUSTRSPADRS or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. COMMONWBK AUSTRSPADRS
Performance |
| Timeline |
| MOVIE GAMES SA |
| COMMONWBK AUSTRSPADRS |
MOVIE GAMES and COMMONWBK AUSTRSPADRS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and COMMONWBK AUSTRSPADRS
The main advantage of trading using opposite MOVIE GAMES and COMMONWBK AUSTRSPADRS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, COMMONWBK AUSTRSPADRS 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 COMMONWBK AUSTRSPADRS will offset losses from the drop in COMMONWBK AUSTRSPADRS's long position.| MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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