Correlation Between Aspire Mining and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Aspire Mining and Commonwealth Bank 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 Aspire Mining and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspire Mining and Commonwealth Bank, you can compare the effects of market volatilities on Aspire Mining and Commonwealth Bank 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 Aspire Mining with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspire Mining and Commonwealth Bank.
Diversification Opportunities for Aspire Mining and Commonwealth Bank
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aspire and Commonwealth is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aspire Mining and Commonwealth Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Aspire Mining 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 Aspire Mining are associated (or correlated) with Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Aspire Mining i.e., Aspire Mining and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Aspire Mining and Commonwealth Bank
Assuming the 90 days trading horizon Aspire Mining is expected to under-perform the Commonwealth Bank. In addition to that, Aspire Mining is 2.62 times more volatile than Commonwealth Bank. It trades about -0.08 of its total potential returns per unit of risk. Commonwealth Bank is currently generating about -0.05 per unit of volatility. If you would invest 15,864 in Commonwealth Bank on October 15, 2024 and sell it today you would lose (259.00) from holding Commonwealth Bank or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspire Mining vs. Commonwealth Bank
Performance |
| Timeline |
| Aspire Mining |
| Commonwealth Bank |
Aspire Mining and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspire Mining and Commonwealth Bank
The main advantage of trading using opposite Aspire Mining and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspire Mining position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Aspire Mining vs. Dug Technology | Aspire Mining vs. Ras Technology Holdings | Aspire Mining vs. Premier Investments | Aspire Mining vs. Regal Investment |
| Commonwealth Bank vs. Argo Investments | Commonwealth Bank vs. Clime Investment Management | Commonwealth Bank vs. Perseus Mining | Commonwealth Bank vs. Aspire 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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