Correlation Between Photon Energy and Cez AS
Can any of the company-specific risk be diversified away by investing in both Photon Energy 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 Photon Energy and Cez AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photon Energy NV and Cez AS, you can compare the effects of market volatilities on Photon Energy 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 Photon Energy with a short position of Cez AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photon Energy and Cez AS.
Diversification Opportunities for Photon Energy and Cez AS
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Photon and Cez is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Photon Energy NV and Cez AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cez AS and Photon Energy 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 Photon Energy NV 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 Photon Energy i.e., Photon Energy and Cez AS go up and down completely randomly.
Pair Corralation between Photon Energy and Cez AS
Assuming the 90 days trading horizon Photon Energy NV is expected to under-perform the Cez AS. In addition to that, Photon Energy is 3.16 times more volatile than Cez AS. It trades about -0.37 of its total potential returns per unit of risk. Cez AS is currently generating about 0.23 per unit of volatility. If you would invest 90,000 in Cez AS on September 12, 2024 and sell it today you would earn a total of 4,800 from holding Cez AS or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photon Energy NV vs. Cez AS
Performance |
| Timeline |
| Photon Energy NV |
| Cez AS |
Photon Energy and Cez AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photon Energy and Cez AS
The main advantage of trading using opposite Photon Energy and Cez AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photon Energy 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.| Photon Energy vs. Moneta Money Bank | Photon Energy vs. Komercni Banka AS | Photon Energy vs. JT ARCH INVESTMENTS | Photon Energy vs. Vienna Insurance Group |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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