Correlation Between Wesfarmers and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Wesfarmers 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 Wesfarmers and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesfarmers and Commonwealth Bank of, you can compare the effects of market volatilities on Wesfarmers 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 Wesfarmers with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesfarmers and Commonwealth Bank.
Diversification Opportunities for Wesfarmers and Commonwealth Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wesfarmers and Commonwealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wesfarmers and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Wesfarmers 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 Wesfarmers 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 Wesfarmers i.e., Wesfarmers and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Wesfarmers and Commonwealth Bank
If you would invest 6,801 in Wesfarmers on October 25, 2024 and sell it today you would earn a total of 431.00 from holding Wesfarmers or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Wesfarmers vs. Commonwealth Bank of
Performance |
| Timeline |
| Wesfarmers |
| Commonwealth Bank |
Wesfarmers and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesfarmers and Commonwealth Bank
The main advantage of trading using opposite Wesfarmers and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesfarmers 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.| Wesfarmers vs. Sky Metals | Wesfarmers vs. Stelar Metals | Wesfarmers vs. Centuria Industrial Reit | Wesfarmers vs. Oceania Healthcare |
| Commonwealth Bank vs. Queste Communications | Commonwealth Bank vs. Oneview Healthcare PLC | Commonwealth Bank vs. MFF Capital Investments | Commonwealth Bank vs. Apiam Animal Health |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |