Correlation Between Commonwealth Bank and Critical Metals
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Critical Metals 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 Critical Metals 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 Critical Metals Corp, you can compare the effects of market volatilities on Commonwealth Bank and Critical Metals 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 Critical Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Critical Metals.
Diversification Opportunities for Commonwealth Bank and Critical Metals
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commonwealth and Critical is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Critical Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Metals Corp 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 Critical Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Metals Corp has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Critical Metals go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Critical Metals
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.12 times more return on investment than Critical Metals. However, Commonwealth Bank of is 8.29 times less risky than Critical Metals. It trades about -0.08 of its potential returns per unit of risk. Critical Metals Corp is currently generating about -0.44 per unit of risk. If you would invest 10,058 in Commonwealth Bank of on December 1, 2024 and sell it today you would lose (296.00) from holding Commonwealth Bank of or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Critical Metals Corp
Performance |
| Timeline |
| Commonwealth Bank |
| Critical Metals Corp |
Commonwealth Bank and Critical Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Critical Metals
The main advantage of trading using opposite Commonwealth Bank and Critical Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Critical Metals 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 Critical Metals will offset losses from the drop in Critical Metals' 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 |
| Critical Metals vs. McDonalds | Critical Metals vs. ServiceNow | Critical Metals vs. Starbucks | Critical Metals vs. Summit Hotel Properties |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance |