Correlation Between Commonwealth Bank and PT Global
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and PT Global 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 Commonwealth Bank and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and PT Global Mediacom, you can compare the effects of market volatilities on Commonwealth Bank and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and PT Global.
Diversification Opportunities for Commonwealth Bank and PT Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and 06L is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and PT Global go up and down completely randomly.
Pair Corralation between Commonwealth Bank and PT Global
Assuming the 90 days horizon Commonwealth Bank is expected to generate 4.26 times less return on investment than PT Global. But when comparing it to its historical volatility, Commonwealth Bank of is 13.86 times less risky than PT Global. It trades about 0.19 of its potential returns per unit of risk. PT Global Mediacom is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.75 in PT Global Mediacom on August 28, 2024 and sell it today you would earn a total of 0.00 from holding PT Global Mediacom or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. PT Global Mediacom
Performance |
| Timeline |
| Commonwealth Bank |
| PT Global Mediacom |
Commonwealth Bank and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and PT Global
The main advantage of trading using opposite Commonwealth Bank and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| Commonwealth Bank vs. Superior Plus Corp | Commonwealth Bank vs. NMI Holdings | Commonwealth Bank vs. Origin Agritech | Commonwealth Bank vs. SIVERS SEMICONDUCTORS AB |
| PT Global vs. LGI Homes | PT Global vs. INVITATION HOMES DL | PT Global vs. American Homes 4 | PT Global vs. The Home Depot |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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