Correlation Between E M and COMMERCIAL BANK
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By analyzing existing cross correlation between E M L and COMMERCIAL BANK OF, you can compare the effects of market volatilities on E M and COMMERCIAL BANK 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 E M with a short position of COMMERCIAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of E M and COMMERCIAL BANK.
Diversification Opportunities for E M and COMMERCIAL BANK
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMLN0000 and COMMERCIAL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding E M L and COMMERCIAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL BANK and E M 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 E M L are associated (or correlated) with COMMERCIAL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL BANK has no effect on the direction of E M i.e., E M and COMMERCIAL BANK go up and down completely randomly.
Pair Corralation between E M and COMMERCIAL BANK
Assuming the 90 days trading horizon E M L is expected to under-perform the COMMERCIAL BANK. In addition to that, E M is 2.83 times more volatile than COMMERCIAL BANK OF. It trades about -0.04 of its total potential returns per unit of risk. COMMERCIAL BANK OF is currently generating about 0.13 per unit of volatility. If you would invest 9,220 in COMMERCIAL BANK OF on August 31, 2024 and sell it today you would earn a total of 230.00 from holding COMMERCIAL BANK OF or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E M L vs. COMMERCIAL BANK OF
Performance |
| Timeline |
| E M L |
| COMMERCIAL BANK |
E M and COMMERCIAL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E M and COMMERCIAL BANK
The main advantage of trading using opposite E M and COMMERCIAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E M position performs unexpectedly, COMMERCIAL BANK 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 COMMERCIAL BANK will offset losses from the drop in COMMERCIAL BANK's long position.The idea behind E M L and COMMERCIAL BANK OF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| COMMERCIAL BANK vs. HNB Finance | COMMERCIAL BANK vs. Prime Lands Residencies | COMMERCIAL BANK vs. Jat Holdings PLC | COMMERCIAL BANK vs. E M L |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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