Correlation Between Komercní Banka and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Komercní Banka 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 Komercní Banka and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Komercn banka as and Commerzbank AG, you can compare the effects of market volatilities on Komercní Banka 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 Komercní Banka with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komercní Banka and Commerzbank.
Diversification Opportunities for Komercní Banka and Commerzbank
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Komercní and Commerzbank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Komercn banka as and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG and Komercní Banka 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 Komercn banka as 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 Komercní Banka i.e., Komercní Banka and Commerzbank go up and down completely randomly.
Pair Corralation between Komercní Banka and Commerzbank
Assuming the 90 days trading horizon Komercn banka as is expected to generate 1.67 times more return on investment than Commerzbank. However, Komercní Banka is 1.67 times more volatile than Commerzbank AG. It trades about 0.27 of its potential returns per unit of risk. Commerzbank AG is currently generating about 0.32 per unit of risk. If you would invest 3,558 in Komercn banka as on December 1, 2024 and sell it today you would earn a total of 586.00 from holding Komercn banka as or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Komercn banka as vs. Commerzbank AG
Performance |
| Timeline |
| Komercn banka as |
| Commerzbank AG |
Komercní Banka and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Komercní Banka and Commerzbank
The main advantage of trading using opposite Komercní Banka and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komercní Banka 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.| Komercní Banka vs. GUILD ESPORTS PLC | Komercní Banka vs. Zijin Mining Group | Komercní Banka vs. USWE SPORTS AB | Komercní Banka vs. Ming Le Sports |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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