Correlation Between CEZ A and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both CEZ A and Fortum Oyj 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 A and Fortum Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ A S and Fortum Oyj ADR, you can compare the effects of market volatilities on CEZ A and Fortum Oyj 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 A with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ A and Fortum Oyj.
Diversification Opportunities for CEZ A and Fortum Oyj
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CEZ and Fortum is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CEZ A S and Fortum Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj ADR and CEZ A 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 A S are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj ADR has no effect on the direction of CEZ A i.e., CEZ A and Fortum Oyj go up and down completely randomly.
Pair Corralation between CEZ A and Fortum Oyj
If you would invest 228.00 in Fortum Oyj ADR on August 27, 2024 and sell it today you would earn a total of 68.00 from holding Fortum Oyj ADR or generate 29.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.53% |
| Values | Daily Returns |
CEZ A S vs. Fortum Oyj ADR
Performance |
| Timeline |
| CEZ A S |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fortum Oyj ADR |
CEZ A and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ A and Fortum Oyj
The main advantage of trading using opposite CEZ A and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ A position performs unexpectedly, Fortum Oyj 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| CEZ A vs. Fortum Oyj | CEZ A vs. Triad Pro Innovators | CEZ A vs. Powertap Hydrogen Capital | CEZ A vs. Clearway Energy Class |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |