Commonwealth Bank Net Income vs. Beta

CBAPJ Preferred Stock   101.89  0.92  0.89%   
Taking into consideration Commonwealth Bank's profitability measurements, Commonwealth Bank of may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Commonwealth Bank's ability to earn profits and add value for shareholders.
For Commonwealth Bank profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Commonwealth Bank to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Commonwealth Bank of utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Commonwealth Bank's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Commonwealth Bank of over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between Commonwealth Bank's value and its price as these two are different measures arrived at by different means. Investors typically determine if Commonwealth Bank is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Commonwealth Bank's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Commonwealth Bank Beta vs. Net Income Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Commonwealth Bank's current stock value. Our valuation model uses many indicators to compare Commonwealth Bank value to that of its competitors to determine the firm's financial worth.
Commonwealth Bank of is rated third in net income category among its peers. It is rated below average in beta category among its peers . The ratio of Net Income to Beta for Commonwealth Bank of is about  12,997,465,910 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Commonwealth Bank by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Commonwealth Bank's Preferred Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.

Commonwealth Beta vs. Net Income

Net income is the profit of a company for the reporting period, which is derived after taking revenues and gains and subtracting all expenses and losses. Net income is one of the most-watched numbers by money managers as well as individual investors.

Commonwealth Bank

Net Income

 = 

(Rev + Gain)

-

(Exp + Loss)

 = 
10.77 B
Because income is reported on the Income Statement of a company and is measured in dollars some investors prefer to use Profit Margin, which measures income as a percentage of sales.
Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of an equity instrument to the financial market in which this instrument is traded. For example, if Beta of equity is 2, it is expected to significantly outperform market when the market is going up and significantly underperform when the market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns over time.

Commonwealth Bank

Beta

 = 

Covariance

Variance

 = 
0.83
In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.

Commonwealth Beta Comparison

Commonwealth Bank is rated fourth in beta category among its peers.

Beta Analysis

As returns on the market increase, Commonwealth Bank's returns are expected to increase less than the market. However, during the bear market, the loss of holding Commonwealth Bank is expected to be smaller as well.

Commonwealth Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Commonwealth Bank. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Commonwealth Bank position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Commonwealth Bank's important profitability drivers and their relationship over time.

Use Commonwealth Bank in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Commonwealth Bank position performs unexpectedly, the other equity 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 appreciate offsetting losses from the drop in the long position's value.

Commonwealth Bank Pair Trading

Commonwealth Bank of Pair Trading Analysis

The ability to find closely correlated positions to Commonwealth Bank could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Commonwealth Bank when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Commonwealth Bank - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Commonwealth Bank of to buy it.
The correlation of Commonwealth Bank is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Commonwealth Bank moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Commonwealth Bank moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Commonwealth Bank can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Commonwealth Bank position

In addition to having Commonwealth Bank in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did You Try This Idea?

Run Farming Thematic Idea Now

Farming
Farming Theme
Companies producing farming products and providing services for farmers. The Farming theme has 37 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Farming Theme or any other thematic opportunities.
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Other Information on Investing in Commonwealth Preferred Stock

To fully project Commonwealth Bank's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Commonwealth Bank at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Commonwealth Bank's income statement, its balance sheet, and the statement of cash flows.
Potential Commonwealth Bank investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Commonwealth Bank investors may work on each financial statement separately, they are all related. The changes in Commonwealth Bank's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Commonwealth Bank's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.