Correlation Between Commerzbank and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both Commerzbank and FUTURE GAMING 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 Commerzbank and FUTURE GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and FUTURE GAMING GRP, you can compare the effects of market volatilities on Commerzbank and FUTURE GAMING 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 Commerzbank with a short position of FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and FUTURE GAMING.
Diversification Opportunities for Commerzbank and FUTURE GAMING
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commerzbank and FUTURE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP and Commerzbank 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 Commerzbank AG are associated (or correlated) with FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of Commerzbank i.e., Commerzbank and FUTURE GAMING go up and down completely randomly.
Pair Corralation between Commerzbank and FUTURE GAMING
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 0.48 times more return on investment than FUTURE GAMING. However, Commerzbank AG is 2.1 times less risky than FUTURE GAMING. It trades about -0.14 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about -0.27 per unit of risk. If you would invest 1,590 in Commerzbank AG on September 12, 2024 and sell it today you would lose (100.00) from holding Commerzbank AG or give up 6.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG vs. FUTURE GAMING GRP
Performance |
| Timeline |
| Commerzbank AG |
| FUTURE GAMING GRP |
Commerzbank and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and FUTURE GAMING
The main advantage of trading using opposite Commerzbank and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.| Commerzbank vs. Superior Plus Corp | Commerzbank vs. SIVERS SEMICONDUCTORS AB | Commerzbank vs. CHINA HUARONG ENERHD 50 | Commerzbank vs. NORDIC HALIBUT AS |
| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. SIVERS SEMICONDUCTORS AB |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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