Correlation Between COMINTL BANK and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both COMINTL BANK and GEAR4MUSIC 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10, you can compare the effects of market volatilities on COMINTL BANK and GEAR4MUSIC 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 GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and GEAR4MUSIC.
Diversification Opportunities for COMINTL BANK and GEAR4MUSIC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COMINTL and GEAR4MUSIC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 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 GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of COMINTL BANK i.e., COMINTL BANK and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between COMINTL BANK and GEAR4MUSIC
Assuming the 90 days trading horizon COMINTL BANK ADR1 is expected to generate 1.15 times more return on investment than GEAR4MUSIC. However, COMINTL BANK is 1.15 times more volatile than GEAR4MUSIC LS 10. It trades about 0.09 of its potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about -0.08 per unit of risk. If you would invest 122.00 in COMINTL BANK ADR1 on August 28, 2024 and sell it today you would earn a total of 5.00 from holding COMINTL BANK ADR1 or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMINTL BANK ADR1 vs. GEAR4MUSIC LS 10
Performance |
| Timeline |
| COMINTL BANK ADR1 |
| GEAR4MUSIC LS 10 |
COMINTL BANK and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMINTL BANK and GEAR4MUSIC
The main advantage of trading using opposite COMINTL BANK and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK position performs unexpectedly, GEAR4MUSIC 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 GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC'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 |
| GEAR4MUSIC vs. PT Bank Maybank | GEAR4MUSIC vs. Ribbon Communications | GEAR4MUSIC vs. SWISS WATER DECAFFCOFFEE | GEAR4MUSIC vs. COMINTL BANK ADR1 |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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