Correlation Between Commonwealth Bank and AMERICAN
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By analyzing existing cross correlation between Commonwealth Bank of and AMERICAN EXPRESS CR, you can compare the effects of market volatilities on Commonwealth Bank and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and AMERICAN.
Diversification Opportunities for Commonwealth Bank and AMERICAN
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commonwealth and AMERICAN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and AMERICAN EXPRESS CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and AMERICAN go up and down completely randomly.
Pair Corralation between Commonwealth Bank and AMERICAN
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 3.62 times more return on investment than AMERICAN. However, Commonwealth Bank is 3.62 times more volatile than AMERICAN EXPRESS CR. It trades about 0.13 of its potential returns per unit of risk. AMERICAN EXPRESS CR is currently generating about 0.01 per unit of risk. If you would invest 8,198 in Commonwealth Bank of on September 14, 2024 and sell it today you would earn a total of 1,897 from holding Commonwealth Bank of or generate 23.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. AMERICAN EXPRESS CR
Performance |
| Timeline |
| Commonwealth Bank |
| AMERICAN EXPRESS |
Commonwealth Bank and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and AMERICAN
The main advantage of trading using opposite Commonwealth Bank and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's 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 |
| AMERICAN vs. Coupang LLC | AMERICAN vs. Encore Capital Group | AMERICAN vs. National Vision Holdings | AMERICAN vs. Commonwealth Bank of |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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