Correlation Between ATRESMEDIA and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA 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 ATRESMEDIA and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and Commonwealth Bank of, you can compare the effects of market volatilities on ATRESMEDIA 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 ATRESMEDIA with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and Commonwealth Bank.
Diversification Opportunities for ATRESMEDIA and Commonwealth Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATRESMEDIA and Commonwealth is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA i.e., ATRESMEDIA and Commonwealth Bank go up and down completely randomly.
Pair Corralation between ATRESMEDIA and Commonwealth Bank
Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 2.19 times less return on investment than Commonwealth Bank. But when comparing it to its historical volatility, ATRESMEDIA is 1.01 times less risky than Commonwealth Bank. It trades about 0.04 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,132 in Commonwealth Bank of on January 28, 2025 and sell it today you would earn a total of 2,208 from holding Commonwealth Bank of or generate 30.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRESMEDIA vs. Commonwealth Bank of
Performance |
| Timeline |
| ATRESMEDIA |
| Commonwealth Bank |
ATRESMEDIA and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and Commonwealth Bank
The main advantage of trading using opposite ATRESMEDIA and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA 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.| ATRESMEDIA vs. The Hanover Insurance | ATRESMEDIA vs. Amkor Technology | ATRESMEDIA vs. FANDIFI TECHNOLOGY P | ATRESMEDIA vs. Easy Software AG |
| Commonwealth Bank vs. KOBE STEEL LTD | Commonwealth Bank vs. Sporting Clube de | Commonwealth Bank vs. MOUNT GIBSON IRON | Commonwealth Bank vs. DICKS Sporting Goods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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