Correlation Between Commonwealth Bank and JIAHUA STORES
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and JIAHUA STORES 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 JIAHUA STORES 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 JIAHUA STORES, you can compare the effects of market volatilities on Commonwealth Bank and JIAHUA STORES 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 JIAHUA STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and JIAHUA STORES.
Diversification Opportunities for Commonwealth Bank and JIAHUA STORES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and JIAHUA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and JIAHUA STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIAHUA STORES 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 JIAHUA STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIAHUA STORES has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and JIAHUA STORES go up and down completely randomly.
Pair Corralation between Commonwealth Bank and JIAHUA STORES
If you would invest 9,330 in Commonwealth Bank of on November 28, 2024 and sell it today you would earn a total of 196.00 from holding Commonwealth Bank of or generate 2.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Commonwealth Bank of vs. JIAHUA STORES
Performance |
Timeline |
Commonwealth Bank |
JIAHUA STORES |
Commonwealth Bank and JIAHUA STORES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Commonwealth Bank and JIAHUA STORES
The main advantage of trading using opposite Commonwealth Bank and JIAHUA STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, JIAHUA STORES 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 JIAHUA STORES will offset losses from the drop in JIAHUA STORES's long position.Commonwealth Bank vs. Waste Management | Commonwealth Bank vs. MAGIC SOFTWARE ENTR | Commonwealth Bank vs. ASURE SOFTWARE | Commonwealth Bank vs. GBS Software AG |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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