Correlation Between Commonwealth Bank and Kinatico
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Kinatico 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 Kinatico 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 Kinatico, you can compare the effects of market volatilities on Commonwealth Bank and Kinatico 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 Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Kinatico.
Diversification Opportunities for Commonwealth Bank and Kinatico
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commonwealth and Kinatico is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico 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 Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Kinatico go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Kinatico
Assuming the 90 days trading horizon Commonwealth Bank of is expected to under-perform the Kinatico. But the stock apears to be less risky and, when comparing its historical volatility, Commonwealth Bank of is 21.18 times less risky than Kinatico. The stock trades about 0.0 of its potential returns per unit of risk. The Kinatico is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Kinatico on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Kinatico or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Commonwealth Bank of vs. Kinatico
Performance |
| Timeline |
| Commonwealth Bank |
| Kinatico |
Commonwealth Bank and Kinatico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Kinatico
The main advantage of trading using opposite Commonwealth Bank and Kinatico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Kinatico 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 Kinatico will offset losses from the drop in Kinatico's long position.| Commonwealth Bank vs. Carawine Resources Limited | Commonwealth Bank vs. Bailador Technology Invest | Commonwealth Bank vs. Macquarie Technology Group | Commonwealth Bank vs. EVE Health Group |
| Kinatico vs. Aneka Tambang Tbk | Kinatico vs. Commonwealth Bank | Kinatico vs. Commonwealth Bank of | Kinatico vs. Australia and New |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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