Correlation Between Brown Forman and COMINTL BANK
Can any of the company-specific risk be diversified away by investing in both Brown Forman and COMINTL 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 Brown Forman and COMINTL BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brown Forman and COMINTL BANK ADR1, you can compare the effects of market volatilities on Brown Forman and COMINTL 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 Brown Forman with a short position of COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brown Forman and COMINTL BANK.
Diversification Opportunities for Brown Forman and COMINTL BANK
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brown and COMINTL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brown Forman and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 and Brown Forman 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 Brown Forman are associated (or correlated) with COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of Brown Forman i.e., Brown Forman and COMINTL BANK go up and down completely randomly.
Pair Corralation between Brown Forman and COMINTL BANK
Assuming the 90 days trading horizon Brown Forman is expected to generate 1.96 times less return on investment than COMINTL BANK. But when comparing it to its historical volatility, Brown Forman is 1.96 times less risky than COMINTL BANK. It trades about 0.08 of its potential returns per unit of risk. COMINTL BANK ADR1 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 123.00 in COMINTL BANK ADR1 on September 5, 2024 and sell it today you would earn a total of 5.00 from holding COMINTL BANK ADR1 or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brown Forman vs. COMINTL BANK ADR1
Performance |
| Timeline |
| Brown Forman |
| COMINTL BANK ADR1 |
Brown Forman and COMINTL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brown Forman and COMINTL BANK
The main advantage of trading using opposite Brown Forman and COMINTL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brown Forman position performs unexpectedly, COMINTL 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 COMINTL BANK will offset losses from the drop in COMINTL BANK's long position.| Brown Forman vs. COMINTL BANK ADR1 | Brown Forman vs. CHIBA BANK | Brown Forman vs. Xenia Hotels Resorts | Brown Forman vs. JSC Halyk bank |
| COMINTL BANK vs. Superior Plus Corp | COMINTL BANK vs. NMI Holdings | COMINTL BANK vs. Origin Agritech | COMINTL BANK vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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