Correlation Between Commonwealth Bank and Althea Group
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Althea Group 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 Commonwealth Bank and Althea Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank and Althea Group Holdings, you can compare the effects of market volatilities on Commonwealth Bank and Althea Group 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 Commonwealth Bank with a short position of Althea Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Althea Group.
Diversification Opportunities for Commonwealth Bank and Althea Group
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and Althea is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank and Althea Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Althea Group Holdings and Commonwealth Bank 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 Commonwealth Bank are associated (or correlated) with Althea Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Althea Group Holdings has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Althea Group go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Althea Group
If you would invest 15,026 in Commonwealth Bank on October 21, 2024 and sell it today you would earn a total of 364.00 from holding Commonwealth Bank or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank vs. Althea Group Holdings
Performance |
| Timeline |
| Commonwealth Bank |
| Althea Group Holdings |
Commonwealth Bank and Althea Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Althea Group
The main advantage of trading using opposite Commonwealth Bank and Althea Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Althea Group 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 Althea Group will offset losses from the drop in Althea Group's long position.| Commonwealth Bank vs. Duketon Mining | Commonwealth Bank vs. DMC Mining | Commonwealth Bank vs. Regal Funds Management | Commonwealth Bank vs. Sayona Mining |
| Althea Group vs. Australian Unity Office | Althea Group vs. Magellan Financial Group | Althea Group vs. K2 Asset Management | Althea Group vs. Platinum Asset Management |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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