Correlation Between CSL and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both CSL and BANK HANDLOWY 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 CSL and BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and BANK HANDLOWY, you can compare the effects of market volatilities on CSL and BANK HANDLOWY 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 CSL with a short position of BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and BANK HANDLOWY.
Diversification Opportunities for CSL and BANK HANDLOWY
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSL and BANK is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and CSL 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 CSL Limited are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of CSL i.e., CSL and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between CSL and BANK HANDLOWY
Assuming the 90 days horizon CSL is expected to generate 27.99 times less return on investment than BANK HANDLOWY. But when comparing it to its historical volatility, CSL Limited is 3.71 times less risky than BANK HANDLOWY. It trades about 0.01 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 500.00 in BANK HANDLOWY on August 28, 2024 and sell it today you would earn a total of 1,530 from holding BANK HANDLOWY or generate 306.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CSL Limited vs. BANK HANDLOWY
Performance |
| Timeline |
| CSL Limited |
| BANK HANDLOWY |
CSL and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and BANK HANDLOWY
The main advantage of trading using opposite CSL and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| CSL vs. Superior Plus Corp | CSL vs. NMI Holdings | CSL vs. Origin Agritech | CSL vs. SIVERS SEMICONDUCTORS AB |
| BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Microsoft | BANK HANDLOWY vs. Microsoft |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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