Correlation Between CEZ As and Enter Air
Can any of the company-specific risk be diversified away by investing in both CEZ As and Enter Air 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 Enter Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Enter Air SA, you can compare the effects of market volatilities on CEZ As and Enter Air 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 Enter Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Enter Air.
Diversification Opportunities for CEZ As and Enter Air
Very weak diversification
The 3 months correlation between CEZ and Enter is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air 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 Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of CEZ As i.e., CEZ As and Enter Air go up and down completely randomly.
Pair Corralation between CEZ As and Enter Air
Assuming the 90 days trading horizon CEZ As is expected to generate 2.63 times less return on investment than Enter Air. But when comparing it to its historical volatility, CEZ as is 1.31 times less risky than Enter Air. It trades about 0.05 of its potential returns per unit of risk. Enter Air SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,364 in Enter Air SA on August 30, 2024 and sell it today you would earn a total of 3,746 from holding Enter Air SA or generate 158.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEZ as vs. Enter Air SA
Performance |
| Timeline |
| CEZ as |
| Enter Air SA |
CEZ As and Enter Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Enter Air
The main advantage of trading using opposite CEZ As and Enter Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Enter Air 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 Enter Air will offset losses from the drop in Enter Air's 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 |
| Enter Air vs. Banco Santander SA | Enter Air vs. UniCredit SpA | Enter Air vs. CEZ as | Enter Air 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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