Correlation Between Commerzbank and CFSB Bancorp
Can any of the company-specific risk be diversified away by investing in both Commerzbank and CFSB Bancorp 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 CFSB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG PK and CFSB Bancorp, you can compare the effects of market volatilities on Commerzbank and CFSB Bancorp 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 CFSB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and CFSB Bancorp.
Diversification Opportunities for Commerzbank and CFSB Bancorp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commerzbank and CFSB is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG PK and CFSB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFSB Bancorp 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 PK are associated (or correlated) with CFSB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFSB Bancorp has no effect on the direction of Commerzbank i.e., Commerzbank and CFSB Bancorp go up and down completely randomly.
Pair Corralation between Commerzbank and CFSB Bancorp
Assuming the 90 days horizon Commerzbank AG PK is expected to generate 1.04 times more return on investment than CFSB Bancorp. However, Commerzbank is 1.04 times more volatile than CFSB Bancorp. It trades about 0.07 of its potential returns per unit of risk. CFSB Bancorp is currently generating about 0.02 per unit of risk. If you would invest 1,088 in Commerzbank AG PK on September 1, 2024 and sell it today you would earn a total of 456.00 from holding Commerzbank AG PK or generate 41.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG PK vs. CFSB Bancorp
Performance |
| Timeline |
| Commerzbank AG PK |
| CFSB Bancorp |
Commerzbank and CFSB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and CFSB Bancorp
The main advantage of trading using opposite Commerzbank and CFSB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, CFSB Bancorp 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 CFSB Bancorp will offset losses from the drop in CFSB Bancorp's long position.| Commerzbank vs. IF Bancorp | Commerzbank vs. Home Bancorp | Commerzbank vs. ConnectOne Bancorp | Commerzbank vs. First Northwest Bancorp |
| CFSB Bancorp vs. IF Bancorp | CFSB Bancorp vs. Home Bancorp | CFSB Bancorp vs. Commerzbank AG PK | CFSB Bancorp vs. ConnectOne Bancorp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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