Correlation Between Emetals and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Emetals and Commonwealth Bank 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 Emetals and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emetals and Commonwealth Bank of, you can compare the effects of market volatilities on Emetals and Commonwealth 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 Emetals with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emetals and Commonwealth Bank.
Diversification Opportunities for Emetals and Commonwealth Bank
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emetals and Commonwealth is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Emetals and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Emetals 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 Emetals are associated (or correlated) with Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Emetals i.e., Emetals and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Emetals and Commonwealth Bank
If you would invest 0.50 in Emetals on September 19, 2024 and sell it today you would earn a total of 0.00 from holding Emetals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Emetals vs. Commonwealth Bank of
Performance |
| Timeline |
| Emetals |
| Commonwealth Bank |
Emetals and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emetals and Commonwealth Bank
The main advantage of trading using opposite Emetals and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emetals position performs unexpectedly, Commonwealth 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Emetals vs. Northern Star Resources | Emetals vs. Evolution Mining | Emetals vs. Bluescope Steel | Emetals vs. Sandfire Resources NL |
| Commonwealth Bank vs. Emetals | Commonwealth Bank vs. Aurelia Metals | Commonwealth Bank vs. Alto Metals | Commonwealth Bank vs. Sky Metals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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