Correlation Between Commerzbank and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both Commerzbank and First Hawaiian 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 First Hawaiian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and First Hawaiian, you can compare the effects of market volatilities on Commerzbank and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and First Hawaiian.
Diversification Opportunities for Commerzbank and First Hawaiian
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commerzbank and First is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Commerzbank i.e., Commerzbank and First Hawaiian go up and down completely randomly.
Pair Corralation between Commerzbank and First Hawaiian
Assuming the 90 days horizon Commerzbank AG is expected to generate 2.35 times more return on investment than First Hawaiian. However, Commerzbank is 2.35 times more volatile than First Hawaiian. It trades about 0.24 of its potential returns per unit of risk. First Hawaiian is currently generating about -0.06 per unit of risk. If you would invest 1,545 in Commerzbank AG on December 29, 2024 and sell it today you would earn a total of 915.00 from holding Commerzbank AG or generate 59.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Commerzbank AG vs. First Hawaiian
Performance |
Timeline |
Commerzbank AG |
First Hawaiian |
Commerzbank and First Hawaiian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Commerzbank and First Hawaiian
The main advantage of trading using opposite Commerzbank and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian's long position.Commerzbank vs. Investar Holding Corp | Commerzbank vs. Colony Bankcorp | Commerzbank vs. Southern Missouri Bancorp | Commerzbank vs. First Northwest Bancorp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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