Correlation Between CEZ As and Allegroeu
Can any of the company-specific risk be diversified away by investing in both CEZ As and Allegroeu 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 Allegroeu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Allegroeu SA, you can compare the effects of market volatilities on CEZ As and Allegroeu 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 Allegroeu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Allegroeu.
Diversification Opportunities for CEZ As and Allegroeu
Excellent diversification
The 3 months correlation between CEZ and Allegroeu is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu 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 Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of CEZ As i.e., CEZ As and Allegroeu go up and down completely randomly.
Pair Corralation between CEZ As and Allegroeu
Assuming the 90 days trading horizon CEZ as is expected to generate 0.8 times more return on investment than Allegroeu. However, CEZ as is 1.24 times less risky than Allegroeu. It trades about 0.06 of its potential returns per unit of risk. Allegroeu SA is currently generating about 0.0 per unit of risk. If you would invest 14,451 in CEZ as on November 3, 2024 and sell it today you would earn a total of 3,489 from holding CEZ as or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEZ as vs. Allegroeu SA
Performance |
| Timeline |
| CEZ as |
| Allegroeu SA |
CEZ As and Allegroeu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Allegroeu
The main advantage of trading using opposite CEZ As and Allegroeu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Allegroeu 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 Allegroeu will offset losses from the drop in Allegroeu's long position.| CEZ As vs. MCI Management SA | CEZ As vs. Santander Bank Polska | CEZ As vs. Inter Cars SA | CEZ As vs. True Games Syndicate |
| Allegroeu vs. Monnari Trade SA | Allegroeu vs. LSI Software SA | Allegroeu vs. PMPG Polskie Media | Allegroeu vs. M Food 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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