Correlation Between Cez AS and Prabos Plus
Can any of the company-specific risk be diversified away by investing in both Cez AS and Prabos Plus 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 Cez AS and Prabos Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cez AS and Prabos Plus as, you can compare the effects of market volatilities on Cez AS and Prabos Plus 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 Cez AS with a short position of Prabos Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cez AS and Prabos Plus.
Diversification Opportunities for Cez AS and Prabos Plus
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cez and Prabos is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cez AS and Prabos Plus as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prabos Plus as and Cez AS 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 Cez AS are associated (or correlated) with Prabos Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prabos Plus as has no effect on the direction of Cez AS i.e., Cez AS and Prabos Plus go up and down completely randomly.
Pair Corralation between Cez AS and Prabos Plus
Assuming the 90 days trading horizon Cez AS is expected to generate 0.41 times more return on investment than Prabos Plus. However, Cez AS is 2.46 times less risky than Prabos Plus. It trades about 0.32 of its potential returns per unit of risk. Prabos Plus as is currently generating about 0.01 per unit of risk. If you would invest 90,100 in Cez AS on August 25, 2024 and sell it today you would earn a total of 6,050 from holding Cez AS or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cez AS vs. Prabos Plus as
Performance |
| Timeline |
| Cez AS |
| Prabos Plus as |
Cez AS and Prabos Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cez AS and Prabos Plus
The main advantage of trading using opposite Cez AS and Prabos Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cez AS position performs unexpectedly, Prabos Plus 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 Prabos Plus will offset losses from the drop in Prabos Plus' long position.| Cez AS vs. Komercni Banka AS | Cez AS vs. Moneta Money Bank | Cez AS vs. Erste Group Bank | Cez AS vs. Colt CZ Group |
| Prabos Plus vs. Volkswagen AG | Prabos Plus vs. GEVORKYAN as | Prabos Plus vs. Philip Morris CR | Prabos Plus vs. Nokia Oyj |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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