Correlation Between CEZ As and Astarta Holding
Can any of the company-specific risk be diversified away by investing in both CEZ As and Astarta Holding 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 Astarta Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Astarta Holding NV, you can compare the effects of market volatilities on CEZ As and Astarta Holding 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 Astarta Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Astarta Holding.
Diversification Opportunities for CEZ As and Astarta Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CEZ and Astarta is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Astarta Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astarta Holding NV 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 Astarta Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astarta Holding NV has no effect on the direction of CEZ As i.e., CEZ As and Astarta Holding go up and down completely randomly.
Pair Corralation between CEZ As and Astarta Holding
Assuming the 90 days trading horizon CEZ As is expected to generate 3.57 times less return on investment than Astarta Holding. But when comparing it to its historical volatility, CEZ as is 1.27 times less risky than Astarta Holding. It trades about 0.01 of its potential returns per unit of risk. Astarta Holding NV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,982 in Astarta Holding NV on September 1, 2024 and sell it today you would earn a total of 768.00 from holding Astarta Holding NV or generate 25.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
CEZ as vs. Astarta Holding NV
Performance |
| Timeline |
| CEZ as |
| Astarta Holding NV |
CEZ As and Astarta Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Astarta Holding
The main advantage of trading using opposite CEZ As and Astarta Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Astarta Holding 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 Astarta Holding will offset losses from the drop in Astarta Holding'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 |
| Astarta Holding vs. Cloud Technologies SA | Astarta Holding vs. ING Bank lski | Astarta Holding vs. Quantum Software SA | Astarta Holding vs. Movie Games 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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