Correlation Between Komercni Banka and Kofola CeskoSlovensko
Can any of the company-specific risk be diversified away by investing in both Komercni Banka and Kofola CeskoSlovensko 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 Kofola CeskoSlovensko 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 Kofola CeskoSlovensko as, you can compare the effects of market volatilities on Komercni Banka and Kofola CeskoSlovensko 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 Kofola CeskoSlovensko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komercni Banka and Kofola CeskoSlovensko.
Diversification Opportunities for Komercni Banka and Kofola CeskoSlovensko
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Komercni and Kofola is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Komercni Banka AS and Kofola CeskoSlovensko as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kofola CeskoSlovensko 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 Kofola CeskoSlovensko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kofola CeskoSlovensko has no effect on the direction of Komercni Banka i.e., Komercni Banka and Kofola CeskoSlovensko go up and down completely randomly.
Pair Corralation between Komercni Banka and Kofola CeskoSlovensko
Assuming the 90 days trading horizon Komercni Banka is expected to generate 1.8 times less return on investment than Kofola CeskoSlovensko. But when comparing it to its historical volatility, Komercni Banka AS is 1.1 times less risky than Kofola CeskoSlovensko. It trades about 0.12 of its potential returns per unit of risk. Kofola CeskoSlovensko as is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 25,496 in Kofola CeskoSlovensko as on November 3, 2024 and sell it today you would earn a total of 15,504 from holding Kofola CeskoSlovensko as or generate 60.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Komercni Banka AS vs. Kofola CeskoSlovensko as
Performance |
| Timeline |
| Komercni Banka AS |
| Kofola CeskoSlovensko |
Komercni Banka and Kofola CeskoSlovensko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Komercni Banka and Kofola CeskoSlovensko
The main advantage of trading using opposite Komercni Banka and Kofola CeskoSlovensko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komercni Banka position performs unexpectedly, Kofola CeskoSlovensko 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 Kofola CeskoSlovensko will offset losses from the drop in Kofola CeskoSlovensko's long position.| Komercni Banka vs. Cez AS | Komercni Banka vs. Moneta Money Bank | Komercni Banka vs. Erste Group Bank | Komercni Banka vs. Colt CZ Group |
| Kofola CeskoSlovensko vs. Moneta Money Bank | Kofola CeskoSlovensko vs. Komercni Banka AS | Kofola CeskoSlovensko vs. Cez AS | Kofola CeskoSlovensko vs. Erste Group Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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