Correlation Between CEZ As and Cloud Technologies
Can any of the company-specific risk be diversified away by investing in both CEZ As and Cloud Technologies 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 Cloud Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Cloud Technologies SA, you can compare the effects of market volatilities on CEZ As and Cloud Technologies 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 Cloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Cloud Technologies.
Diversification Opportunities for CEZ As and Cloud Technologies
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CEZ and Cloud is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies 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 Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of CEZ As i.e., CEZ As and Cloud Technologies go up and down completely randomly.
Pair Corralation between CEZ As and Cloud Technologies
Assuming the 90 days trading horizon CEZ as is expected to generate 0.54 times more return on investment than Cloud Technologies. However, CEZ as is 1.84 times less risky than Cloud Technologies. It trades about 0.08 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about -0.03 per unit of risk. If you would invest 13,705 in CEZ as on November 5, 2024 and sell it today you would earn a total of 4,235 from holding CEZ as or generate 30.9% 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. Cloud Technologies SA
Performance |
| Timeline |
| CEZ as |
| Cloud Technologies |
CEZ As and Cloud Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Cloud Technologies
The main advantage of trading using opposite CEZ As and Cloud Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Cloud Technologies 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 Cloud Technologies will offset losses from the drop in Cloud Technologies' long position.| CEZ As vs. Santander Bank Polska | CEZ As vs. Asseco South Eastern | CEZ As vs. Vercom SA | CEZ As vs. CFI Holding SA |
| Cloud Technologies vs. Ailleron SA | Cloud Technologies vs. Santander Bank Polska | Cloud Technologies vs. Asseco South Eastern | Cloud Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |