Correlation Between Commonwealth Bank and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Commonwealth Bank and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and KIMBALL ELECTRONICS.
Diversification Opportunities for Commonwealth Bank and KIMBALL ELECTRONICS
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commonwealth and KIMBALL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Commonwealth Bank and KIMBALL ELECTRONICS
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.78 times more return on investment than KIMBALL ELECTRONICS. However, Commonwealth Bank of is 1.28 times less risky than KIMBALL ELECTRONICS. It trades about 0.1 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.11 per unit of risk. If you would invest 9,458 in Commonwealth Bank of on November 6, 2024 and sell it today you would earn a total of 193.00 from holding Commonwealth Bank of or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Commonwealth Bank |
| KIMBALL ELECTRONICS |
Commonwealth Bank and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and KIMBALL ELECTRONICS
The main advantage of trading using opposite Commonwealth Bank and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| Commonwealth Bank vs. Perseus Mining Limited | Commonwealth Bank vs. GALENA MINING LTD | Commonwealth Bank vs. Monument Mining Limited | Commonwealth Bank vs. PLAYMATES TOYS |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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