Correlation Between COMINTL BANK and ALD SA
Can any of the company-specific risk be diversified away by investing in both COMINTL BANK and ALD SA 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 COMINTL BANK and ALD SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMINTL BANK ADR1 and ALD SA, you can compare the effects of market volatilities on COMINTL BANK and ALD SA 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 COMINTL BANK with a short position of ALD SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and ALD SA.
Diversification Opportunities for COMINTL BANK and ALD SA
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMINTL and ALD is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 and ALD SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALD SA and COMINTL 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 COMINTL BANK ADR1 are associated (or correlated) with ALD SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALD SA has no effect on the direction of COMINTL BANK i.e., COMINTL BANK and ALD SA go up and down completely randomly.
Pair Corralation between COMINTL BANK and ALD SA
Assuming the 90 days trading horizon COMINTL BANK ADR1 is expected to generate 0.77 times more return on investment than ALD SA. However, COMINTL BANK ADR1 is 1.31 times less risky than ALD SA. It trades about 0.03 of its potential returns per unit of risk. ALD SA is currently generating about -0.04 per unit of risk. If you would invest 123.00 in COMINTL BANK ADR1 on September 4, 2024 and sell it today you would earn a total of 1.00 from holding COMINTL BANK ADR1 or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMINTL BANK ADR1 vs. ALD SA
Performance |
| Timeline |
| COMINTL BANK ADR1 |
| ALD SA |
COMINTL BANK and ALD SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMINTL BANK and ALD SA
The main advantage of trading using opposite COMINTL BANK and ALD SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK position performs unexpectedly, ALD SA 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 ALD SA will offset losses from the drop in ALD SA's long position.| COMINTL BANK vs. Superior Plus Corp | COMINTL BANK vs. NMI Holdings | COMINTL BANK vs. Origin Agritech | COMINTL BANK vs. SIVERS SEMICONDUCTORS AB |
| ALD SA vs. CHIBA BANK | ALD SA vs. COMINTL BANK ADR1 | ALD SA vs. Commonwealth Bank of | ALD SA vs. VIRG NATL BANKSH |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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