Correlation Between Fevertree Drinks and COMINTL BANK
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks and COMINTL 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 Fevertree Drinks and COMINTL BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks PLC and COMINTL BANK ADR1, you can compare the effects of market volatilities on Fevertree Drinks and COMINTL 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 Fevertree Drinks with a short position of COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and COMINTL BANK.
Diversification Opportunities for Fevertree Drinks and COMINTL BANK
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fevertree and COMINTL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks PLC and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 and Fevertree Drinks 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 Fevertree Drinks PLC are associated (or correlated) with COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of Fevertree Drinks i.e., Fevertree Drinks and COMINTL BANK go up and down completely randomly.
Pair Corralation between Fevertree Drinks and COMINTL BANK
Assuming the 90 days trading horizon Fevertree Drinks PLC is expected to under-perform the COMINTL BANK. In addition to that, Fevertree Drinks is 1.25 times more volatile than COMINTL BANK ADR1. It trades about -0.04 of its total potential returns per unit of risk. COMINTL BANK ADR1 is currently generating about 0.09 per unit of volatility. If you would invest 127.00 in COMINTL BANK ADR1 on September 26, 2024 and sell it today you would earn a total of 4.00 from holding COMINTL BANK ADR1 or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fevertree Drinks PLC vs. COMINTL BANK ADR1
Performance |
| Timeline |
| Fevertree Drinks PLC |
| COMINTL BANK ADR1 |
Fevertree Drinks and COMINTL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and COMINTL BANK
The main advantage of trading using opposite Fevertree Drinks and COMINTL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks position performs unexpectedly, COMINTL 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 COMINTL BANK will offset losses from the drop in COMINTL BANK's long position.| Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc |
| COMINTL BANK vs. BNP Paribas SA | COMINTL BANK vs. DNB BANK ASA | COMINTL BANK vs. Deutsche Bank Aktiengesellschaft | COMINTL BANK vs. Socit Gnrale Socit |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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