Correlation Between Commonwealth Bank and US Global
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and US Global 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 US Global 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 US Global Investors, you can compare the effects of market volatilities on Commonwealth Bank and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and US Global.
Diversification Opportunities for Commonwealth Bank and US Global
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commonwealth and GROW is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and US Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Investors 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Investors has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and US Global go up and down completely randomly.
Pair Corralation between Commonwealth Bank and US Global
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 1.1 times more return on investment than US Global. However, Commonwealth Bank is 1.1 times more volatile than US Global Investors. It trades about 0.15 of its potential returns per unit of risk. US Global Investors is currently generating about -0.02 per unit of risk. If you would invest 8,012 in Commonwealth Bank of on September 2, 2024 and sell it today you would earn a total of 2,328 from holding Commonwealth Bank of or generate 29.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. US Global Investors
Performance |
| Timeline |
| Commonwealth Bank |
| US Global Investors |
Commonwealth Bank and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and US Global
The main advantage of trading using opposite Commonwealth Bank and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| Commonwealth Bank vs. Bank of America | Commonwealth Bank vs. Bank of America | Commonwealth Bank vs. Bank of America | Commonwealth Bank vs. Bank of America |
| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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