Correlation Between Smurfit and Commonwealth Bank
Specify exactly 2 symbols:
By analyzing existing cross correlation between Smurfit Kappa Group and Commonwealth Bank of, you can compare the effects of market volatilities on Smurfit 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 Smurfit with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit and Commonwealth Bank.
Diversification Opportunities for Smurfit and Commonwealth Bank
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smurfit and Commonwealth is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Smurfit 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 Smurfit Kappa Group 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 Smurfit i.e., Smurfit and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Smurfit and Commonwealth Bank
Assuming the 90 days trading horizon Smurfit Kappa Group is expected to under-perform the Commonwealth Bank. But the bond apears to be less risky and, when comparing its historical volatility, Smurfit Kappa Group is 3.52 times less risky than Commonwealth Bank. The bond trades about -0.01 of its potential returns per unit of risk. The Commonwealth Bank of is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,098 in Commonwealth Bank of on September 12, 2024 and sell it today you would earn a total of 4,173 from holding Commonwealth Bank of or generate 68.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 49.7% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Commonwealth Bank of
Performance |
| Timeline |
| Smurfit Kappa Group |
| Commonwealth Bank |
Smurfit and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit and Commonwealth Bank
The main advantage of trading using opposite Smurfit and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit 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.The idea behind Smurfit Kappa Group and Commonwealth Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Commonwealth Bank vs. Svenska Handelsbanken PK | Commonwealth Bank vs. ANZ Group Holdings | Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. National Australia Bank |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |