Correlation Between Commonwealth Bank and ABACUS STORAGE
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and ABACUS STORAGE 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 ABACUS STORAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank and ABACUS STORAGE KING, you can compare the effects of market volatilities on Commonwealth Bank and ABACUS STORAGE 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 ABACUS STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and ABACUS STORAGE.
Diversification Opportunities for Commonwealth Bank and ABACUS STORAGE
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and ABACUS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank and ABACUS STORAGE KING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABACUS STORAGE KING 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 ABACUS STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABACUS STORAGE KING has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and ABACUS STORAGE go up and down completely randomly.
Pair Corralation between Commonwealth Bank and ABACUS STORAGE
Assuming the 90 days trading horizon Commonwealth Bank is expected to under-perform the ABACUS STORAGE. But the stock apears to be less risky and, when comparing its historical volatility, Commonwealth Bank is 1.05 times less risky than ABACUS STORAGE. The stock trades about -0.05 of its potential returns per unit of risk. The ABACUS STORAGE KING is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 112.00 in ABACUS STORAGE KING on October 15, 2024 and sell it today you would earn a total of 3.00 from holding ABACUS STORAGE KING or generate 2.68% 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. ABACUS STORAGE KING
Performance |
| Timeline |
| Commonwealth Bank |
| ABACUS STORAGE KING |
Commonwealth Bank and ABACUS STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and ABACUS STORAGE
The main advantage of trading using opposite Commonwealth Bank and ABACUS STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, ABACUS STORAGE 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 ABACUS STORAGE will offset losses from the drop in ABACUS STORAGE's long position.| Commonwealth Bank vs. Hotel Property Investments | Commonwealth Bank vs. Pinnacle Investment Management | Commonwealth Bank vs. Ainsworth Game Technology | Commonwealth Bank vs. Argo Investments |
| ABACUS STORAGE vs. Alternative Investment Trust | ABACUS STORAGE vs. National Storage REIT | ABACUS STORAGE vs. Pinnacle Investment Management | ABACUS STORAGE vs. Microequities 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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