Correlation Between SIDETRADE and COMMONWBK AUSTRSPADRS

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

By analyzing existing cross correlation between SIDETRADE EO 1 and COMMONWBK AUSTRSPADRS, you can compare the effects of market volatilities on SIDETRADE and COMMONWBK AUSTRSPADRS 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 SIDETRADE with a short position of COMMONWBK AUSTRSPADRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and COMMONWBK AUSTRSPADRS.

Diversification Opportunities for SIDETRADE and COMMONWBK AUSTRSPADRS

0.76

Correlation Coefficient

SIDETRADE  COMMONWBK AUSTRSPADRS

Poor diversification

The 3 months correlation between SIDETRADE and COMMONWBK is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and COMMONWBK AUSTRSPADRS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMONWBK AUSTRSPADRS and SIDETRADE 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 SIDETRADE EO 1 are associated (or correlated) with COMMONWBK AUSTRSPADRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMONWBK AUSTRSPADRS has no effect on the direction of SIDETRADE i.e., SIDETRADE and COMMONWBK AUSTRSPADRS go up and down completely randomly.

Pair Corralation between SIDETRADE and COMMONWBK AUSTRSPADRS

Assuming the 90 days horizon SIDETRADE EO 1 is expected to generate 1.62 times more return on investment than COMMONWBK AUSTRSPADRS. However, SIDETRADE is 1.62 times more volatile than COMMONWBK AUSTRSPADRS. It trades about 0.07 of its potential returns per unit of risk. COMMONWBK AUSTRSPADRS is currently generating about 0.05 per unit of risk. If you would invest  21,900  in SIDETRADE EO 1 on April 25, 2025 and sell it today you would earn a total of  1,700  from holding SIDETRADE EO 1 or generate 7.76% return on investment over 90 days.

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

SIDETRADE EO 1  vs.  COMMONWBK AUSTRSPADRS

SIDETRADE EO 1

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SIDETRADE EO 1 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIDETRADE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

COMMONWBK AUSTRSPADRS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COMMONWBK AUSTRSPADRS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, COMMONWBK AUSTRSPADRS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIDETRADE and COMMONWBK AUSTRSPADRS

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

The idea behind SIDETRADE EO 1 and COMMONWBK AUSTRSPADRS 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.