Correlation Between China Southern and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both China Southern 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 China Southern and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Southern Airlines and Commonwealth Bank of, you can compare the effects of market volatilities on China Southern 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 China Southern with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Southern and Commonwealth Bank.
Diversification Opportunities for China Southern and Commonwealth Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Commonwealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and China Southern 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 China Southern Airlines 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 China Southern i.e., China Southern and Commonwealth Bank go up and down completely randomly.
Pair Corralation between China Southern and Commonwealth Bank
If you would invest 9,331 in Commonwealth Bank of on October 20, 2024 and sell it today you would earn a total of 108.00 from holding Commonwealth Bank of or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.88% |
| Values | Daily Returns |
China Southern Airlines vs. Commonwealth Bank of
Performance |
| Timeline |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Commonwealth Bank |
China Southern and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Southern and Commonwealth Bank
The main advantage of trading using opposite China Southern and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Southern 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.| China Southern vs. Sun Life Financial | China Southern vs. Ameriprise Financial | China Southern vs. CONTAGIOUS GAMING INC | China Southern vs. DETALION GAMES SA |
| Commonwealth Bank vs. ITALIAN WINE BRANDS | Commonwealth Bank vs. Yuexiu Transport Infrastructure | Commonwealth Bank vs. Forsys Metals Corp | Commonwealth Bank vs. ARDAGH METAL PACDL 0001 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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