Correlation Between Ceconomy and Polished
Can any of the company-specific risk be diversified away by investing in both Ceconomy and Polished 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 Ceconomy and Polished into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceconomy AG ADR and Polished, you can compare the effects of market volatilities on Ceconomy and Polished 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 Ceconomy with a short position of Polished. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceconomy and Polished.
Diversification Opportunities for Ceconomy and Polished
Weak diversification
The 3 months correlation between Ceconomy and Polished is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ceconomy AG ADR and Polished in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polished and Ceconomy 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 Ceconomy AG ADR are associated (or correlated) with Polished. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polished has no effect on the direction of Ceconomy i.e., Ceconomy and Polished go up and down completely randomly.
Pair Corralation between Ceconomy and Polished
If you would invest 64.00 in Ceconomy AG ADR on August 30, 2024 and sell it today you would lose (5.00) from holding Ceconomy AG ADR or give up 7.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Ceconomy AG ADR vs. Polished
Performance |
| Timeline |
| Ceconomy AG ADR |
| Polished |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ceconomy and Polished Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceconomy and Polished
The main advantage of trading using opposite Ceconomy and Polished positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceconomy position performs unexpectedly, Polished 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 Polished will offset losses from the drop in Polished's long position.| Ceconomy vs. Green River Gold | Ceconomy vs. Dixons Carphone plc | Ceconomy vs. Tandy Leather Factory | Ceconomy vs. Card Factory plc |
| Polished vs. Sally Beauty Holdings | Polished vs. National Vision Holdings | Polished vs. Big 5 Sporting | Polished vs. Pet Acquisition LLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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