Correlation Between BlackRock Frontiers and Commerzbank
Can any of the company-specific risk be diversified away by investing in both BlackRock Frontiers and Commerzbank 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 BlackRock Frontiers and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Frontiers Investment and Commerzbank AG, you can compare the effects of market volatilities on BlackRock Frontiers and Commerzbank 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 BlackRock Frontiers with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Frontiers and Commerzbank.
Diversification Opportunities for BlackRock Frontiers and Commerzbank
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlackRock and Commerzbank is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Frontiers Investment and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG and BlackRock Frontiers 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 BlackRock Frontiers Investment are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of BlackRock Frontiers i.e., BlackRock Frontiers and Commerzbank go up and down completely randomly.
Pair Corralation between BlackRock Frontiers and Commerzbank
Assuming the 90 days trading horizon BlackRock Frontiers is expected to generate 4.61 times less return on investment than Commerzbank. But when comparing it to its historical volatility, BlackRock Frontiers Investment is 1.78 times less risky than Commerzbank. It trades about 0.04 of its potential returns per unit of risk. Commerzbank AG is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Commerzbank AG on November 5, 2024 and sell it today you would earn a total of 788.00 from holding Commerzbank AG or generate 73.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Frontiers Investment vs. Commerzbank AG
Performance |
| Timeline |
| BlackRock Frontiers |
| Commerzbank AG |
BlackRock Frontiers and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Frontiers and Commerzbank
The main advantage of trading using opposite BlackRock Frontiers and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Frontiers position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| BlackRock Frontiers vs. Veolia Environnement VE | BlackRock Frontiers vs. Symphony Environmental Technologies | BlackRock Frontiers vs. Erste Group Bank | BlackRock Frontiers vs. St Galler Kantonalbank |
| Commerzbank vs. Sartorius Stedim Biotech | Commerzbank vs. Premier Foods PLC | Commerzbank vs. Take Two Interactive Software | Commerzbank vs. Polar Capital Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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