Correlation Between Commonwealth Bank and TTG Fintech
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and TTG Fintech 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 TTG Fintech 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 TTG Fintech, you can compare the effects of market volatilities on Commonwealth Bank and TTG Fintech 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 TTG Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and TTG Fintech.
Diversification Opportunities for Commonwealth Bank and TTG Fintech
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and TTG is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and TTG Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTG Fintech 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 TTG Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTG Fintech has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and TTG Fintech go up and down completely randomly.
Pair Corralation between Commonwealth Bank and TTG Fintech
Assuming the 90 days trading horizon Commonwealth Bank of is expected to generate 0.14 times more return on investment than TTG Fintech. However, Commonwealth Bank of is 7.23 times less risky than TTG Fintech. It trades about 0.05 of its potential returns per unit of risk. TTG Fintech is currently generating about -0.21 per unit of risk. If you would invest 10,310 in Commonwealth Bank of on September 14, 2024 and sell it today you would earn a total of 50.00 from holding Commonwealth Bank of or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. TTG Fintech
Performance |
| Timeline |
| Commonwealth Bank |
| TTG Fintech |
Commonwealth Bank and TTG Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and TTG Fintech
The main advantage of trading using opposite Commonwealth Bank and TTG Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, TTG Fintech 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 TTG Fintech will offset losses from the drop in TTG Fintech's long position.| Commonwealth Bank vs. Commonwealth Bank of | Commonwealth Bank vs. Westpac Banking Corp | Commonwealth Bank vs. Ecofibre | Commonwealth Bank vs. iShares Global Healthcare |
| TTG Fintech vs. Aneka Tambang Tbk | TTG Fintech vs. National Australia Bank | TTG Fintech vs. Commonwealth Bank of | TTG Fintech 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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