Correlation Between CEZ As and Logintrade
Can any of the company-specific risk be diversified away by investing in both CEZ As and Logintrade 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 Logintrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Logintrade SA, you can compare the effects of market volatilities on CEZ As and Logintrade 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 Logintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Logintrade.
Diversification Opportunities for CEZ As and Logintrade
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CEZ and Logintrade is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Logintrade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logintrade 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 Logintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logintrade SA has no effect on the direction of CEZ As i.e., CEZ As and Logintrade go up and down completely randomly.
Pair Corralation between CEZ As and Logintrade
Assuming the 90 days trading horizon CEZ As is expected to generate 1.25 times less return on investment than Logintrade. But when comparing it to its historical volatility, CEZ as is 1.81 times less risky than Logintrade. It trades about 0.13 of its potential returns per unit of risk. Logintrade SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Logintrade SA on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Logintrade SA or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.42% |
| Values | Daily Returns |
CEZ as vs. Logintrade SA
Performance |
| Timeline |
| CEZ as |
| Logintrade SA |
CEZ As and Logintrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Logintrade
The main advantage of trading using opposite CEZ As and Logintrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Logintrade 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 Logintrade will offset losses from the drop in Logintrade's long position.| CEZ As vs. Asseco Business Solutions | CEZ As vs. Detalion Games SA | CEZ As vs. Asseco South Eastern | CEZ As vs. Movie Games SA |
| Logintrade vs. GreenX Metals | Logintrade vs. Baked Games SA | Logintrade vs. SOFTWARE MANSION SPOLKA | Logintrade vs. True Games Syndicate |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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