Correlation Between Transport International and Commonwealth Bank

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

By analyzing existing cross correlation between Transport International Holdings and Commonwealth Bank of, you can compare the effects of market volatilities on Transport International and Commonwealth 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 Transport International with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Commonwealth Bank.

Diversification Opportunities for Transport International and Commonwealth Bank

0.59

Correlation Coefficient

Transport International  Commonwealth Bank

Very weak diversification

The 3 months correlation between Transport and Commonwealth is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Transport International 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 Transport International Holdings are associated (or correlated) with Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Transport International i.e., Transport International and Commonwealth Bank go up and down completely randomly.

Pair Corralation between Transport International and Commonwealth Bank

Assuming the 90 days horizon Transport International Holdings is expected to under-perform the Commonwealth Bank. In addition to that, Transport International is 1.44 times more volatile than Commonwealth Bank of. It trades about 0.0 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.09 per unit of volatility. If you would invest  5,720  in Commonwealth Bank of on April 16, 2025 and sell it today you would earn a total of  4,338  from holding Commonwealth Bank of or generate 75.84% return on investment over 90 days.

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

Transport International Holdin  vs.  Commonwealth Bank of

Transport International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Transport International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Commonwealth Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Commonwealth Bank of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Commonwealth Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Transport International and Commonwealth Bank

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

The idea behind Transport International Holdings and Commonwealth Bank of 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 Global Correlations module to find global opportunities by holding instruments from different markets.