Correlation Between Commonwealth Bank and Singular Health
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Singular Health 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 Singular Health 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 Singular Health Group, you can compare the effects of market volatilities on Commonwealth Bank and Singular Health 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 Singular Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Singular Health.
Diversification Opportunities for Commonwealth Bank and Singular Health
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Commonwealth and Singular is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Singular Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singular Health Group 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 Singular Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singular Health Group has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Singular Health go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Singular Health
Assuming the 90 days trading horizon Commonwealth Bank of is expected to under-perform the Singular Health. But the preferred stock apears to be less risky and, when comparing its historical volatility, Commonwealth Bank of is 9.95 times less risky than Singular Health. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Singular Health Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 8.40 in Singular Health Group on September 5, 2024 and sell it today you would earn a total of 3.60 from holding Singular Health Group or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Singular Health Group
Performance |
| Timeline |
| Commonwealth Bank |
| Singular Health Group |
Commonwealth Bank and Singular Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Singular Health
The main advantage of trading using opposite Commonwealth Bank and Singular Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Singular Health 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 Singular Health will offset losses from the drop in Singular Health's long position.| Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. Commonwealth Bank | Commonwealth Bank vs. Australia and New |
| Singular Health vs. Aneka Tambang Tbk | Singular Health vs. BHP Group Limited | Singular Health vs. Commonwealth Bank of | Singular Health 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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