Correlation Between CEZ As and AB SA
Can any of the company-specific risk be diversified away by investing in both CEZ As and AB 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 AB 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 AB SA, you can compare the effects of market volatilities on CEZ As and AB 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 AB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and AB SA.
Diversification Opportunities for CEZ As and AB SA
Very good diversification
The 3 months correlation between CEZ and ABE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and AB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB 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 AB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SA has no effect on the direction of CEZ As i.e., CEZ As and AB SA go up and down completely randomly.
Pair Corralation between CEZ As and AB SA
Assuming the 90 days trading horizon CEZ as is expected to generate 0.63 times more return on investment than AB SA. However, CEZ as is 1.58 times less risky than AB SA. It trades about 0.04 of its potential returns per unit of risk. AB SA is currently generating about 0.0 per unit of risk. If you would invest 15,555 in CEZ as on September 1, 2024 and sell it today you would earn a total of 895.00 from holding CEZ as or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
CEZ as vs. AB SA
Performance |
| Timeline |
| CEZ as |
| AB SA |
CEZ As and AB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and AB SA
The main advantage of trading using opposite CEZ As and AB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, AB 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 AB SA will offset losses from the drop in AB SA's long position.| CEZ As vs. SOFTWARE MANSION SPOLKA | CEZ As vs. LSI Software SA | CEZ As vs. PMPG Polskie Media | CEZ As vs. Globe Trade Centre |
| AB SA vs. Echo Investment SA | AB SA vs. Esotiq Henderson SA | AB SA vs. Asseco South Eastern | AB SA vs. Vercom 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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