Correlation Between Commonwealth Bank and Kinatico

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Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Kinatico 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 Commonwealth Bank and Kinatico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Kinatico, you can compare the effects of market volatilities on Commonwealth Bank and Kinatico 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 Commonwealth Bank with a short position of Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Kinatico.

Diversification Opportunities for Commonwealth Bank and Kinatico

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Commonwealth and Kinatico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico and Commonwealth Bank 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 Commonwealth Bank of are associated (or correlated) with Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Kinatico go up and down completely randomly.

Pair Corralation between Commonwealth Bank and Kinatico

If you would invest  12.00  in Kinatico on September 7, 2024 and sell it today you would earn a total of  3.00  from holding Kinatico or generate 25.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Commonwealth Bank of  vs.  Kinatico

 Performance 
       Timeline  
Commonwealth Bank 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Insignificant
Over the last 90 days Commonwealth Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Commonwealth Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Kinatico 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kinatico are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Kinatico unveiled solid returns over the last few months and may actually be approaching a breakup point.

Commonwealth Bank and Kinatico Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Commonwealth Bank and Kinatico

The main advantage of trading using opposite Commonwealth Bank and Kinatico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Kinatico 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 Kinatico will offset losses from the drop in Kinatico's long position.
The idea behind Commonwealth Bank of and Kinatico 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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