Correlation Between COMINTL BANK and United Utilities
Can any of the company-specific risk be diversified away by investing in both COMINTL BANK and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on COMINTL BANK and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and United Utilities.
Diversification Opportunities for COMINTL BANK and United Utilities
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between COMINTL and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of COMINTL BANK i.e., COMINTL BANK and United Utilities go up and down completely randomly.
Pair Corralation between COMINTL BANK and United Utilities
Assuming the 90 days trading horizon COMINTL BANK ADR1 is expected to generate 1.0 times more return on investment than United Utilities. However, COMINTL BANK ADR1 is 1.0 times less risky than United Utilities. It trades about -0.06 of its potential returns per unit of risk. United Utilities Group is currently generating about -0.33 per unit of risk. If you would invest 127.00 in COMINTL BANK ADR1 on October 14, 2024 and sell it today you would lose (3.00) from holding COMINTL BANK ADR1 or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMINTL BANK ADR1 vs. United Utilities Group
Performance |
| Timeline |
| COMINTL BANK ADR1 |
| United Utilities |
COMINTL BANK and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMINTL BANK and United Utilities
The main advantage of trading using opposite COMINTL BANK and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| COMINTL BANK vs. Santander Bank Polska | COMINTL BANK vs. Superior Plus Corp | COMINTL BANK vs. NMI Holdings | COMINTL BANK vs. SIVERS SEMICONDUCTORS AB |
| United Utilities vs. Dentsply Sirona | United Utilities vs. TOMBADOR IRON LTD | United Utilities vs. STEEL DYNAMICS | United Utilities vs. DENTSPLY SIRONA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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