Correlation Between Commerzbank and AMALGAMATED FIN

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

By analyzing existing cross correlation between Commerzbank AG and AMALGAMATED FIN DL 01, you can compare the effects of market volatilities on Commerzbank and AMALGAMATED FIN 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 AMALGAMATED FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and AMALGAMATED FIN.

Diversification Opportunities for Commerzbank and AMALGAMATED FIN

0.82

Correlation Coefficient

Commerzbank  AMALGAMATED FIN

Very poor diversification

The 3 months correlation between Commerzbank and AMALGAMATED is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and AMALGAMATED FIN DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMALGAMATED FIN DL 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 AMALGAMATED FIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMALGAMATED FIN DL has no effect on the direction of Commerzbank i.e., Commerzbank and AMALGAMATED FIN go up and down completely randomly.

Pair Corralation between Commerzbank and AMALGAMATED FIN

Assuming the 90 days trading horizon Commerzbank AG is expected to generate 1.34 times more return on investment than AMALGAMATED FIN. However, Commerzbank is 1.34 times more volatile than AMALGAMATED FIN DL 01. It trades about 0.14 of its potential returns per unit of risk. AMALGAMATED FIN DL 01 is currently generating about 0.15 per unit of risk. If you would invest  2,282  in Commerzbank AG on April 23, 2025 and sell it today you would earn a total of  518.00  from holding Commerzbank AG or generate 22.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Commerzbank AG  vs.  AMALGAMATED FIN DL 01

Commerzbank AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Commerzbank AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Commerzbank unveiled solid returns over the last few months and may actually be approaching a breakup point.

AMALGAMATED FIN DL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMALGAMATED FIN DL 01 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, AMALGAMATED FIN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Commerzbank and AMALGAMATED FIN

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

The idea behind Commerzbank AG and AMALGAMATED FIN DL 01 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.