Correlation Between Commonwealth Bank and Cochlear
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Cochlear 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 Cochlear 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 Cochlear, you can compare the effects of market volatilities on Commonwealth Bank and Cochlear 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 Cochlear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Cochlear.
Diversification Opportunities for Commonwealth Bank and Cochlear
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and Cochlear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Cochlear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cochlear 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 Cochlear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cochlear has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Cochlear go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Cochlear
If you would invest 28,540 in Cochlear on August 28, 2024 and sell it today you would earn a total of 1,616 from holding Cochlear or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Cochlear
Performance |
| Timeline |
| Commonwealth Bank |
| Cochlear |
Commonwealth Bank and Cochlear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Cochlear
The main advantage of trading using opposite Commonwealth Bank and Cochlear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Cochlear 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 Cochlear will offset losses from the drop in Cochlear's long position.| Commonwealth Bank vs. Bailador Technology Invest | Commonwealth Bank vs. Super Retail Group | Commonwealth Bank vs. Ras Technology Holdings | Commonwealth Bank vs. Alto Metals |
| Cochlear vs. Credit Clear | Cochlear vs. Finexia Financial Group | Cochlear vs. Westpac Banking | Cochlear vs. Macquarie Bank 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |