Correlation Between CEZ As and Inter Cars
Can any of the company-specific risk be diversified away by investing in both CEZ As and Inter Cars 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 Inter Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Inter Cars SA, you can compare the effects of market volatilities on CEZ As and Inter Cars 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 Inter Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Inter Cars.
Diversification Opportunities for CEZ As and Inter Cars
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CEZ and Inter is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Inter Cars SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Cars 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 Inter Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Cars SA has no effect on the direction of CEZ As i.e., CEZ As and Inter Cars go up and down completely randomly.
Pair Corralation between CEZ As and Inter Cars
Assuming the 90 days trading horizon CEZ as is expected to generate 0.94 times more return on investment than Inter Cars. However, CEZ as is 1.06 times less risky than Inter Cars. It trades about 0.04 of its potential returns per unit of risk. Inter Cars SA is currently generating about 0.02 per unit of risk. If you would invest 11,691 in CEZ as on August 30, 2024 and sell it today you would earn a total of 3,929 from holding CEZ as or generate 33.61% 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. Inter Cars SA
Performance |
| Timeline |
| CEZ as |
| Inter Cars SA |
CEZ As and Inter Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Inter Cars
The main advantage of trading using opposite CEZ As and Inter Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Inter Cars 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 Inter Cars will offset losses from the drop in Inter Cars' 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 |
| Inter Cars vs. Banco Santander SA | Inter Cars vs. UniCredit SpA | Inter Cars vs. CEZ as | Inter Cars vs. Polski Koncern Naftowy |
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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