Correlation Between Commonwealth Bank and Prologis
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on Commonwealth Bank and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Prologis.
Diversification Opportunities for Commonwealth Bank and Prologis
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and Prologis is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Prologis go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Prologis
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.86 times more return on investment than Prologis. However, Commonwealth Bank of is 1.16 times less risky than Prologis. It trades about 0.14 of its potential returns per unit of risk. Prologis is currently generating about 0.01 per unit of risk. If you would invest 5,442 in Commonwealth Bank of on September 12, 2024 and sell it today you would earn a total of 4,183 from holding Commonwealth Bank of or generate 76.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Commonwealth Bank of vs. Prologis
Performance |
| Timeline |
| Commonwealth Bank |
| Prologis |
Commonwealth Bank and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Prologis
The main advantage of trading using opposite Commonwealth Bank and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' long position.| Commonwealth Bank vs. Aluminum of | Commonwealth Bank vs. TITANIUM TRANSPORTGROUP | Commonwealth Bank vs. Transportadora de Gas | Commonwealth Bank vs. Texas Roadhouse |
| Prologis vs. OAKTRSPECLENDNEW | Prologis vs. Commonwealth Bank of | Prologis vs. Webster Financial | Prologis vs. Autohome ADR |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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