Correlation Between COMINTL BANK and CHIBA BANK

Can any of the company-specific risk be diversified away by investing in both COMINTL BANK and CHIBA 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 COMINTL BANK and CHIBA BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COMINTL BANK ADR1 and CHIBA BANK, you can compare the effects of market volatilities on COMINTL BANK and CHIBA 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 COMINTL BANK with a short position of CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and CHIBA BANK.

Diversification Opportunities for COMINTL BANK and CHIBA BANK

0.04

Correlation Coefficient

COMINTL BANK  CHIBA BANK

Significant diversification

The 3 months correlation between COMINTL and CHIBA is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK and COMINTL 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 COMINTL BANK ADR1 are associated (or correlated) with CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of COMINTL BANK i.e., COMINTL BANK and CHIBA BANK go up and down completely randomly.

Pair Corralation between COMINTL BANK and CHIBA BANK

Assuming the 90 days trading horizon COMINTL BANK ADR1 is expected to generate 0.86 times more return on investment than CHIBA BANK. However, COMINTL BANK ADR1 is 1.16 times less risky than CHIBA BANK. It trades about 0.07 of its potential returns per unit of risk. CHIBA BANK is currently generating about -0.01 per unit of risk. If you would invest  128.00  in COMINTL BANK ADR1 on September 22, 2024 and sell it today you would earn a total of  3.00  from holding COMINTL BANK ADR1 or generate 2.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

COMINTL BANK ADR1  vs.  CHIBA BANK

COMINTL BANK ADR1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COMINTL BANK ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COMINTL BANK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CHIBA BANK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHIBA BANK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CHIBA BANK is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with COMINTL BANK and CHIBA BANK

The main advantage of trading using opposite COMINTL BANK and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK position performs unexpectedly, CHIBA 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.

The idea behind COMINTL BANK ADR1 and CHIBA BANK 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 CEOs Directory module to screen CEOs from public companies around the world.