Correlation Between CEZ As and Atal SA
Can any of the company-specific risk be diversified away by investing in both CEZ As and Atal SA 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 Atal SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Atal SA, you can compare the effects of market volatilities on CEZ As and Atal SA 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 Atal SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Atal SA.
Diversification Opportunities for CEZ As and Atal SA
Poor diversification
The 3 months correlation between CEZ and Atal is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Atal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atal SA 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 Atal SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atal SA has no effect on the direction of CEZ As i.e., CEZ As and Atal SA go up and down completely randomly.
Pair Corralation between CEZ As and Atal SA
Assuming the 90 days trading horizon CEZ as is expected to generate 1.88 times more return on investment than Atal SA. However, CEZ As is 1.88 times more volatile than Atal SA. It trades about 0.14 of its potential returns per unit of risk. Atal SA is currently generating about 0.13 per unit of risk. If you would invest 15,390 in CEZ as on August 30, 2024 and sell it today you would earn a total of 920.00 from holding CEZ as or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEZ as vs. Atal SA
Performance |
| Timeline |
| CEZ as |
| Atal SA |
CEZ As and Atal SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Atal SA
The main advantage of trading using opposite CEZ As and Atal SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Atal SA 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 Atal SA will offset losses from the drop in Atal SA's long position.| CEZ As vs. Asseco Business Solutions | CEZ As vs. Detalion Games SA | CEZ As vs. CFI Holding SA | CEZ As vs. HM Inwest SA |
| Atal SA vs. Inter Cars SA | Atal SA vs. Saule Technologies SA | Atal SA vs. LSI Software SA | Atal SA vs. Creotech Instruments SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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