Correlation Between Commercial International and Alfa Laval
Can any of the company-specific risk be diversified away by investing in both Commercial International and Alfa Laval 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 Commercial International and Alfa Laval into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial International Bank and Alfa Laval AB, you can compare the effects of market volatilities on Commercial International and Alfa Laval 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 Commercial International with a short position of Alfa Laval. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Alfa Laval.
Diversification Opportunities for Commercial International and Alfa Laval
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Commercial and Alfa is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Alfa Laval AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Laval AB and Commercial International 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 Commercial International Bank are associated (or correlated) with Alfa Laval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Laval AB has no effect on the direction of Commercial International i.e., Commercial International and Alfa Laval go up and down completely randomly.
Pair Corralation between Commercial International and Alfa Laval
Assuming the 90 days horizon Commercial International Bank is expected to generate 1.53 times more return on investment than Alfa Laval. However, Commercial International is 1.53 times more volatile than Alfa Laval AB. It trades about 0.04 of its potential returns per unit of risk. Alfa Laval AB is currently generating about 0.03 per unit of risk. If you would invest 116.00 in Commercial International Bank on August 31, 2024 and sell it today you would earn a total of 36.00 from holding Commercial International Bank or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Commercial International Bank vs. Alfa Laval AB
Performance |
| Timeline |
| Commercial International |
| Alfa Laval AB |
Commercial International and Alfa Laval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Alfa Laval
The main advantage of trading using opposite Commercial International and Alfa Laval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, Alfa Laval 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 Alfa Laval will offset losses from the drop in Alfa Laval's long position.| Commercial International vs. Bank Mandiri Persero | Commercial International vs. Turkiye Garanti Bankasi | Commercial International vs. BOC Hong Kong | Commercial International vs. Hang Seng Bank |
| Alfa Laval vs. GE Aerospace | Alfa Laval vs. Eaton PLC | Alfa Laval vs. Siemens AG Class | Alfa Laval vs. Schneider Electric SE |
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.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |