Correlation Between Commonwealth Bank and Jade Gas
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Jade Gas 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 Jade Gas 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 Jade Gas Holdings, you can compare the effects of market volatilities on Commonwealth Bank and Jade Gas 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 Jade Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Jade Gas.
Diversification Opportunities for Commonwealth Bank and Jade Gas
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commonwealth and Jade is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Jade Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Gas Holdings 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 Jade Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Gas Holdings has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Jade Gas go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Jade Gas
Assuming the 90 days trading horizon Commonwealth Bank of is expected to generate 0.15 times more return on investment than Jade Gas. However, Commonwealth Bank of is 6.56 times less risky than Jade Gas. It trades about -0.07 of its potential returns per unit of risk. Jade Gas Holdings is currently generating about -0.17 per unit of risk. If you would invest 10,244 in Commonwealth Bank of on September 14, 2024 and sell it today you would lose (93.00) from holding Commonwealth Bank of or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Jade Gas Holdings
Performance |
| Timeline |
| Commonwealth Bank |
| Jade Gas Holdings |
Commonwealth Bank and Jade Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Jade Gas
The main advantage of trading using opposite Commonwealth Bank and Jade Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Jade Gas 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 Jade Gas will offset losses from the drop in Jade Gas' long position.| Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. Commonwealth Bank | Commonwealth Bank vs. Commonwealth Bank of | Commonwealth Bank vs. Commonwealth Bank of |
| Jade Gas vs. Perpetual Credit Income | Jade Gas vs. Pioneer Credit | Jade Gas vs. Commonwealth Bank of | Jade Gas vs. Bell 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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