Correlation Between Polski Koncern and CEZ As
Can any of the company-specific risk be diversified away by investing in both Polski Koncern 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 Polski Koncern and CEZ As into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polski Koncern Naftowy and CEZ as, you can compare the effects of market volatilities on Polski Koncern 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 Polski Koncern with a short position of CEZ As. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and CEZ As.
Diversification Opportunities for Polski Koncern and CEZ As
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Polski and CEZ is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and CEZ as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ as and Polski Koncern 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 Polski Koncern Naftowy 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 Polski Koncern i.e., Polski Koncern and CEZ As go up and down completely randomly.
Pair Corralation between Polski Koncern and CEZ As
Assuming the 90 days trading horizon Polski Koncern is expected to generate 2.06 times less return on investment than CEZ As. But when comparing it to its historical volatility, Polski Koncern Naftowy is 1.14 times less risky than CEZ As. It trades about 0.08 of its potential returns per unit of risk. CEZ as is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 16,220 in CEZ as on November 3, 2024 and sell it today you would earn a total of 1,720 from holding CEZ as or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. CEZ as
Performance |
| Timeline |
| Polski Koncern Naftowy |
| CEZ as |
Polski Koncern and CEZ As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and CEZ As
The main advantage of trading using opposite Polski Koncern and CEZ As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern 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' long position.| Polski Koncern vs. TEN SQUARE GAMES | Polski Koncern vs. Bank Millennium SA | Polski Koncern vs. Vivid Games SA | Polski Koncern vs. BNP Paribas Bank |
| CEZ As vs. Gremi Media SA | CEZ As vs. ING Bank lski | CEZ As vs. Varsav Game Studios | CEZ As vs. True Games Syndicate |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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