Correlation Between Kinatico and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Kinatico 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 Kinatico and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinatico and Commonwealth Bank of, you can compare the effects of market volatilities on Kinatico 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 Kinatico with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinatico and Commonwealth Bank.
Diversification Opportunities for Kinatico and Commonwealth Bank
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinatico and Commonwealth is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kinatico and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Kinatico 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 Kinatico 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 Kinatico i.e., Kinatico and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Kinatico and Commonwealth Bank
Assuming the 90 days trading horizon Kinatico is expected to generate 15.81 times more return on investment than Commonwealth Bank. However, Kinatico is 15.81 times more volatile than Commonwealth Bank of. It trades about 0.14 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.12 per unit of risk. If you would invest 11.00 in Kinatico on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Kinatico or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinatico vs. Commonwealth Bank of
Performance |
| Timeline |
| Kinatico |
| Commonwealth Bank |
Kinatico and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinatico and Commonwealth Bank
The main advantage of trading using opposite Kinatico and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinatico 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.| Kinatico vs. Hotel Property Investments | Kinatico vs. Pinnacle Investment Management | Kinatico vs. Green Technology Metals | Kinatico vs. Actinogen Medical |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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