Correlation Between Commonwealth Bank and NISOURCE
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By analyzing existing cross correlation between Commonwealth Bank of and NISOURCE FIN P, you can compare the effects of market volatilities on Commonwealth Bank and NISOURCE 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 NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and NISOURCE.
Diversification Opportunities for Commonwealth Bank and NISOURCE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and NISOURCE is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and NISOURCE go up and down completely randomly.
Pair Corralation between Commonwealth Bank and NISOURCE
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 1.23 times more return on investment than NISOURCE. However, Commonwealth Bank is 1.23 times more volatile than NISOURCE FIN P. It trades about 0.13 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about 0.07 per unit of risk. If you would invest 9,883 in Commonwealth Bank of on September 12, 2024 and sell it today you would earn a total of 388.00 from holding Commonwealth Bank of or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Commonwealth Bank of vs. NISOURCE FIN P
Performance |
| Timeline |
| Commonwealth Bank |
| NISOURCE FIN P |
Commonwealth Bank and NISOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and NISOURCE
The main advantage of trading using opposite Commonwealth Bank and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, NISOURCE 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 NISOURCE will offset losses from the drop in NISOURCE'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 |
| NISOURCE vs. Century Aluminum | NISOURCE vs. CECO Environmental Corp | NISOURCE vs. Amgen Inc | NISOURCE vs. Tianjin Capital Environmental |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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