Correlation Between Commonwealth Bank and Carters
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Carters 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 Carters 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 Carters, you can compare the effects of market volatilities on Commonwealth Bank and Carters 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 Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Carters.
Diversification Opportunities for Commonwealth Bank and Carters
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and Carters is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Carters go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Carters
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.73 times more return on investment than Carters. However, Commonwealth Bank of is 1.38 times less risky than Carters. It trades about -0.18 of its potential returns per unit of risk. Carters is currently generating about -0.19 per unit of risk. If you would invest 10,102 in Commonwealth Bank of on October 15, 2024 and sell it today you would lose (534.00) from holding Commonwealth Bank of or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Carters
Performance |
| Timeline |
| Commonwealth Bank |
| Carters |
Commonwealth Bank and Carters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Carters
The main advantage of trading using opposite Commonwealth Bank and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.| Commonwealth Bank vs. Svenska Handelsbanken PK | Commonwealth Bank vs. ANZ Group Holdings | Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. National Australia Bank |
| Carters vs. Childrens Place | Carters vs. Gildan Activewear | Carters vs. Oxford Industries | Carters vs. Columbia Sportswear |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |