Correlation Between Commonwealth Bank and Infomedia
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Infomedia 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 Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Infomedia, you can compare the effects of market volatilities on Commonwealth Bank and Infomedia 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 Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Infomedia.
Diversification Opportunities for Commonwealth Bank and Infomedia
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and Infomedia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia 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 of are associated (or correlated) with Infomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infomedia has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Infomedia go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Infomedia
Assuming the 90 days trading horizon Commonwealth Bank of is expected to under-perform the Infomedia. But the preferred stock apears to be less risky and, when comparing its historical volatility, Commonwealth Bank of is 11.72 times less risky than Infomedia. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Infomedia is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Infomedia on September 5, 2024 and sell it today you would lose (1.00) from holding Infomedia or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Infomedia
Performance |
| Timeline |
| Commonwealth Bank |
| Infomedia |
Commonwealth Bank and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Infomedia
The main advantage of trading using opposite Commonwealth Bank and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Infomedia 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 Infomedia will offset losses from the drop in Infomedia's long position.| Commonwealth Bank vs. Commonwealth Bank of | Commonwealth Bank vs. Ecofibre | Commonwealth Bank vs. iShares Global Healthcare | Commonwealth Bank vs. Australian Dairy Farms |
| Infomedia vs. Aneka Tambang Tbk | Infomedia vs. BHP Group Limited | Infomedia vs. Commonwealth Bank of | Infomedia vs. Commonwealth Bank of |
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 Stocks Directory module to find actively traded stocks across global markets.
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