Correlation Between Commonwealth Bank and ImExHS
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and ImExHS 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 ImExHS 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 ImExHS, you can compare the effects of market volatilities on Commonwealth Bank and ImExHS 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 ImExHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and ImExHS.
Diversification Opportunities for Commonwealth Bank and ImExHS
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commonwealth and ImExHS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and ImExHS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImExHS 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 ImExHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImExHS has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and ImExHS go up and down completely randomly.
Pair Corralation between Commonwealth Bank and ImExHS
Assuming the 90 days trading horizon Commonwealth Bank of is expected to generate 0.1 times more return on investment than ImExHS. However, Commonwealth Bank of is 10.14 times less risky than ImExHS. It trades about 0.08 of its potential returns per unit of risk. ImExHS is currently generating about -0.02 per unit of risk. If you would invest 9,369 in Commonwealth Bank of on August 31, 2024 and sell it today you would earn a total of 971.00 from holding Commonwealth Bank of or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.53% |
| Values | Daily Returns |
Commonwealth Bank of vs. ImExHS
Performance |
| Timeline |
| Commonwealth Bank |
| ImExHS |
Commonwealth Bank and ImExHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and ImExHS
The main advantage of trading using opposite Commonwealth Bank and ImExHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, ImExHS 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 ImExHS will offset losses from the drop in ImExHS'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 |
| ImExHS vs. Andean Silver Limited | ImExHS vs. Hotel Property Investments | ImExHS vs. Super Retail Group | ImExHS vs. Black Rock Mining |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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