Correlation Between Edita Food and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Edita Food and Commerzbank 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 Edita Food and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and Commerzbank AG, you can compare the effects of market volatilities on Edita Food and Commerzbank 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 Edita Food with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Commerzbank.
Diversification Opportunities for Edita Food and Commerzbank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edita and Commerzbank is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG and Edita Food 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 Edita Food Industries are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of Edita Food i.e., Edita Food and Commerzbank go up and down completely randomly.
Pair Corralation between Edita Food and Commerzbank
If you would invest 1,510 in Commerzbank AG on October 25, 2024 and sell it today you would earn a total of 276.00 from holding Commerzbank AG or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Commerzbank AG
Performance |
| Timeline |
| Edita Food Industries |
| Commerzbank AG |
Edita Food and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Commerzbank
The main advantage of trading using opposite Edita Food and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Edita Food vs. BYD Co | Edita Food vs. Volkswagen AG | Edita Food vs. Volkswagen AG Non Vtg | Edita Food vs. Deutsche Post AG |
| Commerzbank vs. PPHE Hotel Group | Commerzbank vs. Invesco Physical Silver | Commerzbank vs. Edita Food Industries | Commerzbank vs. Hecla Mining Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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