Correlation Between Commerzbank and Baraboo Bancorporation
Can any of the company-specific risk be diversified away by investing in both Commerzbank and Baraboo Bancorporation 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 Commerzbank and Baraboo Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and Baraboo Bancorporation, you can compare the effects of market volatilities on Commerzbank and Baraboo Bancorporation 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 Commerzbank with a short position of Baraboo Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Baraboo Bancorporation.
Diversification Opportunities for Commerzbank and Baraboo Bancorporation
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commerzbank and Baraboo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and Baraboo Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baraboo Bancorporation and Commerzbank 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 Commerzbank AG are associated (or correlated) with Baraboo Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baraboo Bancorporation has no effect on the direction of Commerzbank i.e., Commerzbank and Baraboo Bancorporation go up and down completely randomly.
Pair Corralation between Commerzbank and Baraboo Bancorporation
Assuming the 90 days horizon Commerzbank AG is expected to under-perform the Baraboo Bancorporation. In addition to that, Commerzbank is 2.06 times more volatile than Baraboo Bancorporation. It trades about -0.01 of its total potential returns per unit of risk. Baraboo Bancorporation is currently generating about 0.06 per unit of volatility. If you would invest 298.00 in Baraboo Bancorporation on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Baraboo Bancorporation or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Commerzbank AG vs. Baraboo Bancorp.
Performance |
| Timeline |
| Commerzbank AG |
| Baraboo Bancorporation |
Commerzbank and Baraboo Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Baraboo Bancorporation
The main advantage of trading using opposite Commerzbank and Baraboo Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, Baraboo Bancorporation 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 Baraboo Bancorporation will offset losses from the drop in Baraboo Bancorporation's long position.| Commerzbank vs. Piraeus Bank SA | Commerzbank vs. Turkiye Garanti Bankasi | Commerzbank vs. Delhi Bank Corp | Commerzbank vs. Uwharrie Capital Corp |
| Baraboo Bancorporation vs. Piraeus Bank SA | Baraboo Bancorporation vs. Turkiye Garanti Bankasi | Baraboo Bancorporation vs. Delhi Bank Corp | Baraboo Bancorporation vs. Uwharrie Capital Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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