Correlation Between Hansen Technologies and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Hansen Technologies 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 Hansen Technologies and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansen Technologies and Commonwealth Bank of, you can compare the effects of market volatilities on Hansen Technologies 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 Hansen Technologies with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and Commonwealth Bank.
Diversification Opportunities for Hansen Technologies and Commonwealth Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hansen and Commonwealth is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies i.e., Hansen Technologies and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Hansen Technologies and Commonwealth Bank
Assuming the 90 days trading horizon Hansen Technologies is expected to generate 4.99 times more return on investment than Commonwealth Bank. However, Hansen Technologies is 4.99 times more volatile than Commonwealth Bank of. It trades about 0.02 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.06 per unit of risk. If you would invest 489.00 in Hansen Technologies on October 25, 2024 and sell it today you would earn a total of 45.00 from holding Hansen Technologies or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansen Technologies vs. Commonwealth Bank of
Performance |
| Timeline |
| Hansen Technologies |
| Commonwealth Bank |
Hansen Technologies and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansen Technologies and Commonwealth Bank
The main advantage of trading using opposite Hansen Technologies and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies 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.| Hansen Technologies vs. Djerriwarrh Investments | Hansen Technologies vs. My Foodie Box | Hansen Technologies vs. Neurotech International | Hansen Technologies vs. Anteris Technologies |
| Commonwealth Bank vs. DMC Mining | Commonwealth Bank vs. MetalsGrove Mining | Commonwealth Bank vs. Global Health | Commonwealth Bank vs. Peel Mining |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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