Correlation Between Commonwealth Bank and Imricor Medical
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Imricor Medical 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 Imricor Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank and Imricor Medical Systems, you can compare the effects of market volatilities on Commonwealth Bank and Imricor Medical 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 Imricor Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Imricor Medical.
Diversification Opportunities for Commonwealth Bank and Imricor Medical
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Commonwealth and Imricor is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank and Imricor Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imricor Medical Systems 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 Imricor Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imricor Medical Systems has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Imricor Medical go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Imricor Medical
Assuming the 90 days trading horizon Commonwealth Bank is expected to generate 5.29 times less return on investment than Imricor Medical. But when comparing it to its historical volatility, Commonwealth Bank is 4.82 times less risky than Imricor Medical. It trades about 0.19 of its potential returns per unit of risk. Imricor Medical Systems is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Imricor Medical Systems on September 26, 2024 and sell it today you would earn a total of 54.00 from holding Imricor Medical Systems or generate 96.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank vs. Imricor Medical Systems
Performance |
| Timeline |
| Commonwealth Bank |
| Imricor Medical Systems |
Commonwealth Bank and Imricor Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Imricor Medical
The main advantage of trading using opposite Commonwealth Bank and Imricor Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Imricor Medical 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 Imricor Medical will offset losses from the drop in Imricor Medical's long position.| Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. Advanced Braking Technology | Commonwealth Bank vs. Ras Technology Holdings | Commonwealth Bank vs. Collins Foods |
| Imricor Medical vs. Aneka Tambang Tbk | Imricor Medical vs. Woolworths | Imricor Medical vs. Commonwealth Bank | Imricor Medical vs. BHP Group Limited |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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