Correlation Between Infineon Technologies and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Infineon Technologies and Commerzbank 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 Infineon Technologies and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infineon Technologies AG and Commerzbank AG, you can compare the effects of market volatilities on Infineon Technologies and Commerzbank 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 Infineon Technologies with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Commerzbank.
Diversification Opportunities for Infineon Technologies and Commerzbank
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Infineon and Commerzbank is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG and Infineon 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 Infineon Technologies AG are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Commerzbank go up and down completely randomly.
Pair Corralation between Infineon Technologies and Commerzbank
Assuming the 90 days trading horizon Infineon Technologies is expected to generate 8.44 times less return on investment than Commerzbank. In addition to that, Infineon Technologies is 1.1 times more volatile than Commerzbank AG. It trades about 0.01 of its total potential returns per unit of risk. Commerzbank AG is currently generating about 0.09 per unit of volatility. If you would invest 313,529 in Commerzbank AG on August 25, 2024 and sell it today you would earn a total of 309,871 from holding Commerzbank AG or generate 98.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.64% |
| Values | Daily Returns |
Infineon Technologies AG vs. Commerzbank AG
Performance |
| Timeline |
| Infineon Technologies |
| Commerzbank AG |
Infineon Technologies and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infineon Technologies and Commerzbank
The main advantage of trading using opposite Infineon Technologies and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infineon Technologies position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Infineon Technologies vs. OTP Bank Nyrt | Infineon Technologies vs. MOL Nyrt | Infineon Technologies vs. OPUS GLOBAL Nyrt | Infineon Technologies vs. ALTEO Energiaszolgaltato Nyrt |
| Commerzbank vs. OTP Bank Nyrt | Commerzbank vs. MOL Nyrt | Commerzbank vs. OPUS GLOBAL Nyrt | Commerzbank vs. ALTEO Energiaszolgaltato Nyrt |
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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