Correlation Between Komercni Banka and Cez AS
Can any of the company-specific risk be diversified away by investing in both Komercni Banka and Cez AS 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 Komercni Banka and Cez AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Komercni Banka AS and Cez AS, you can compare the effects of market volatilities on Komercni Banka and Cez AS 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 Komercni Banka with a short position of Cez AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komercni Banka and Cez AS.
Diversification Opportunities for Komercni Banka and Cez AS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Komercni and Cez is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Komercni Banka AS and Cez AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cez AS and Komercni Banka 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 Komercni Banka AS are associated (or correlated) with Cez AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cez AS has no effect on the direction of Komercni Banka i.e., Komercni Banka and Cez AS go up and down completely randomly.
Pair Corralation between Komercni Banka and Cez AS
Assuming the 90 days trading horizon Komercni Banka is expected to generate 1.03 times less return on investment than Cez AS. But when comparing it to its historical volatility, Komercni Banka AS is 1.27 times less risky than Cez AS. It trades about 0.12 of its potential returns per unit of risk. Cez AS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 81,834 in Cez AS on November 3, 2024 and sell it today you would earn a total of 24,566 from holding Cez AS or generate 30.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Komercni Banka AS vs. Cez AS
Performance |
| Timeline |
| Komercni Banka AS |
| Cez AS |
Komercni Banka and Cez AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Komercni Banka and Cez AS
The main advantage of trading using opposite Komercni Banka and Cez AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komercni Banka position performs unexpectedly, Cez AS 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 Cez AS will offset losses from the drop in Cez AS's long position.| Komercni Banka vs. Cez AS | Komercni Banka vs. Moneta Money Bank | Komercni Banka vs. Erste Group Bank | Komercni Banka vs. Philip Morris CR |
| Cez AS vs. Komercni Banka AS | Cez AS vs. Moneta Money Bank | Cez AS vs. Erste Group Bank | Cez AS vs. Colt CZ Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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