Correlation Between Commonwealth Bank and Tradegate
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Tradegate 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Commonwealth Bank and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Tradegate.
Diversification Opportunities for Commonwealth Bank and Tradegate
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and Tradegate is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Tradegate go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Tradegate
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 4.44 times more return on investment than Tradegate. However, Commonwealth Bank is 4.44 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about -0.03 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.17 per unit of risk. If you would invest 9,429 in Commonwealth Bank of on November 29, 2024 and sell it today you would lose (97.00) from holding Commonwealth Bank of or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| Commonwealth Bank |
| Tradegate AG Wertpap |
Commonwealth Bank and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Tradegate
The main advantage of trading using opposite Commonwealth Bank and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate'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 |
| Tradegate vs. Alliance Data Systems | Tradegate vs. KENEDIX OFFICE INV | Tradegate vs. Tower One Wireless | Tradegate vs. MAVEN WIRELESS SWEDEN |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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