Correlation Between Commonwealth Bank and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Commonwealth Bank and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Compagnie Plastic.
Diversification Opportunities for Commonwealth Bank and Compagnie Plastic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commonwealth and Compagnie is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Compagnie Plastic
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.56 times more return on investment than Compagnie Plastic. However, Commonwealth Bank of is 1.8 times less risky than Compagnie Plastic. It trades about 0.11 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.04 per unit of risk. If you would invest 7,556 in Commonwealth Bank of on September 29, 2024 and sell it today you would earn a total of 1,582 from holding Commonwealth Bank of or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Commonwealth Bank |
| Compagnie Plastic Omnium |
Commonwealth Bank and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Compagnie Plastic
The main advantage of trading using opposite Commonwealth Bank and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Commonwealth Bank vs. China Construction Bank | Commonwealth Bank vs. HSBC Holdings plc | Commonwealth Bank vs. HSBC Holdings plc | Commonwealth Bank vs. Royal Bank of |
| Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. DENSO P ADR | Compagnie Plastic vs. Aptiv PLC | Compagnie Plastic vs. PT Astra International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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