Correlation Between Techgen Metals and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Techgen Metals 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 Techgen Metals and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techgen Metals and Commonwealth Bank of, you can compare the effects of market volatilities on Techgen Metals 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 Techgen Metals with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techgen Metals and Commonwealth Bank.
Diversification Opportunities for Techgen Metals and Commonwealth Bank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Techgen and Commonwealth is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Techgen Metals and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Techgen Metals 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 Techgen Metals 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 Techgen Metals i.e., Techgen Metals and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Techgen Metals and Commonwealth Bank
Assuming the 90 days trading horizon Techgen Metals is expected to generate 13.06 times more return on investment than Commonwealth Bank. However, Techgen Metals is 13.06 times more volatile than Commonwealth Bank of. It trades about 0.19 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.01 per unit of risk. If you would invest 2.80 in Techgen Metals on September 20, 2024 and sell it today you would earn a total of 0.80 from holding Techgen Metals or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techgen Metals vs. Commonwealth Bank of
Performance |
| Timeline |
| Techgen Metals |
| Commonwealth Bank |
Techgen Metals and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techgen Metals and Commonwealth Bank
The main advantage of trading using opposite Techgen Metals and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techgen Metals 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.| Techgen Metals vs. Commonwealth Bank of | Techgen Metals vs. Macquarie Bank Limited | Techgen Metals vs. National Australia Bank | Techgen Metals vs. Medibank Private |
| Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. Commonwealth Bank | Commonwealth Bank vs. Commonwealth Bank of | Commonwealth Bank vs. Commonwealth Bank of |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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