Correlation Between CEZ As and Text SA
Can any of the company-specific risk be diversified away by investing in both CEZ As and Text SA 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 Text SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Text SA, you can compare the effects of market volatilities on CEZ As and Text SA 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 Text SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Text SA.
Diversification Opportunities for CEZ As and Text SA
Very good diversification
The 3 months correlation between CEZ and Text is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Text SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Text 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 Text SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Text SA has no effect on the direction of CEZ As i.e., CEZ As and Text SA go up and down completely randomly.
Pair Corralation between CEZ As and Text SA
Assuming the 90 days trading horizon CEZ as is expected to generate 0.73 times more return on investment than Text SA. However, CEZ as is 1.37 times less risky than Text SA. It trades about 0.0 of its potential returns per unit of risk. Text SA is currently generating about -0.07 per unit of risk. If you would invest 16,991 in CEZ as on August 25, 2024 and sell it today you would lose (561.00) from holding CEZ as or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.28% |
| Values | Daily Returns |
CEZ as vs. Text SA
Performance |
| Timeline |
| CEZ as |
| Text SA |
CEZ As and Text SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and Text SA
The main advantage of trading using opposite CEZ As and Text SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Text SA 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 Text SA will offset losses from the drop in Text SA'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 |
| Text SA vs. Banco Santander SA | Text SA vs. UniCredit SpA | Text SA vs. CEZ as | Text SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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