Correlation Between Commonwealth Bank and Immuron
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Immuron 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 Immuron 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 Immuron, you can compare the effects of market volatilities on Commonwealth Bank and Immuron 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 Immuron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Immuron.
Diversification Opportunities for Commonwealth Bank and Immuron
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commonwealth and Immuron is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Immuron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immuron 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 Immuron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immuron has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Immuron go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Immuron
Assuming the 90 days trading horizon Commonwealth Bank is expected to generate 8.6 times less return on investment than Immuron. But when comparing it to its historical volatility, Commonwealth Bank of is 19.64 times less risky than Immuron. It trades about 0.06 of its potential returns per unit of risk. Immuron is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7.70 in Immuron on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Immuron or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Immuron
Performance |
| Timeline |
| Commonwealth Bank |
| Immuron |
Commonwealth Bank and Immuron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Immuron
The main advantage of trading using opposite Commonwealth Bank and Immuron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Immuron 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 Immuron will offset losses from the drop in Immuron's long position.| Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. Commonwealth Bank | Commonwealth Bank vs. Commonwealth Bank of | Commonwealth Bank vs. Commonwealth Bank of |
| Immuron vs. Bailador Technology Invest | Immuron vs. Computershare | Immuron vs. Qbe Insurance Group | Immuron vs. EP Financial Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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