Correlation Between Commonwealth Bank and Imugene
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Imugene 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 Imugene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank and Imugene, you can compare the effects of market volatilities on Commonwealth Bank and Imugene 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 Imugene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Imugene.
Diversification Opportunities for Commonwealth Bank and Imugene
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and Imugene is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene 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 Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Imugene go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Imugene
Assuming the 90 days trading horizon Commonwealth Bank is expected to generate 0.21 times more return on investment than Imugene. However, Commonwealth Bank is 4.75 times less risky than Imugene. It trades about 0.09 of its potential returns per unit of risk. Imugene is currently generating about -0.02 per unit of risk. If you would invest 10,080 in Commonwealth Bank on November 2, 2024 and sell it today you would earn a total of 5,981 from holding Commonwealth Bank or generate 59.34% 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. Imugene
Performance |
| Timeline |
| Commonwealth Bank |
| Imugene |
Commonwealth Bank and Imugene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Imugene
The main advantage of trading using opposite Commonwealth Bank and Imugene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Imugene 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 Imugene will offset losses from the drop in Imugene's long position.| Commonwealth Bank vs. Medibank Private | Commonwealth Bank vs. Aurelia Metals | Commonwealth Bank vs. Kip McGrath Education | Commonwealth Bank vs. Finexia Financial Group |
| Imugene vs. Hutchison Telecommunications | Imugene vs. Medical Developments International | Imugene vs. Aurelia Metals | Imugene vs. Actinogen Medical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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