Correlation Between EMvision Medical and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both EMvision Medical 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 EMvision Medical and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMvision Medical Devices and Commonwealth Bank, you can compare the effects of market volatilities on EMvision Medical 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 EMvision Medical with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMvision Medical and Commonwealth Bank.
Diversification Opportunities for EMvision Medical and Commonwealth Bank
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EMvision and Commonwealth is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding EMvision Medical Devices and Commonwealth Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and EMvision Medical 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 EMvision Medical Devices 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 EMvision Medical i.e., EMvision Medical and Commonwealth Bank go up and down completely randomly.
Pair Corralation between EMvision Medical and Commonwealth Bank
Assuming the 90 days trading horizon EMvision Medical Devices is expected to under-perform the Commonwealth Bank. In addition to that, EMvision Medical is 2.57 times more volatile than Commonwealth Bank. It trades about -0.01 of its total potential returns per unit of risk. Commonwealth Bank is currently generating about 0.37 per unit of volatility. If you would invest 14,293 in Commonwealth Bank on August 31, 2024 and sell it today you would earn a total of 1,565 from holding Commonwealth Bank or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMvision Medical Devices vs. Commonwealth Bank
Performance |
| Timeline |
| EMvision Medical Devices |
| Commonwealth Bank |
EMvision Medical and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMvision Medical and Commonwealth Bank
The main advantage of trading using opposite EMvision Medical and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMvision Medical 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.| EMvision Medical vs. Spirit Telecom | EMvision Medical vs. ABACUS STORAGE KING | EMvision Medical vs. Dicker Data | EMvision Medical vs. Lendlease Group |
| Commonwealth Bank vs. Oneview Healthcare PLC | Commonwealth Bank vs. Mayfield Childcare | Commonwealth Bank vs. Toys R Us | Commonwealth Bank vs. Event Hospitality and |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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