Correlation Between Infomedia and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Infomedia 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 Infomedia and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infomedia and Commonwealth Bank of, you can compare the effects of market volatilities on Infomedia 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 Infomedia with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infomedia and Commonwealth Bank.
Diversification Opportunities for Infomedia and Commonwealth Bank
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Infomedia and Commonwealth is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Infomedia 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 Infomedia 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 Infomedia i.e., Infomedia and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Infomedia and Commonwealth Bank
Assuming the 90 days trading horizon Infomedia is expected to under-perform the Commonwealth Bank. In addition to that, Infomedia is 14.59 times more volatile than Commonwealth Bank of. It trades about -0.07 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.15 per unit of volatility. If you would invest 10,470 in Commonwealth Bank of on November 3, 2024 and sell it today you would earn a total of 65.00 from holding Commonwealth Bank of or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infomedia vs. Commonwealth Bank of
Performance |
| Timeline |
| Infomedia |
| Commonwealth Bank |
Infomedia and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infomedia and Commonwealth Bank
The main advantage of trading using opposite Infomedia and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infomedia 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.| Infomedia vs. Collins Foods | Infomedia vs. Charter Hall Retail | Infomedia vs. Pure Foods Tasmania | Infomedia vs. Autosports Group |
| Commonwealth Bank vs. Vitura Health Limited | Commonwealth Bank vs. Sonic Healthcare | Commonwealth Bank vs. Oneview Healthcare PLC | Commonwealth Bank vs. Aurelia 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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