Correlation Between Toma As and Colt CZ
Can any of the company-specific risk be diversified away by investing in both Toma As and Colt CZ 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 Toma As and Colt CZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toma as and Colt CZ Group, you can compare the effects of market volatilities on Toma As and Colt CZ 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 Toma As with a short position of Colt CZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toma As and Colt CZ.
Diversification Opportunities for Toma As and Colt CZ
Modest diversification
The 3 months correlation between Toma and Colt is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Toma as and Colt CZ Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colt CZ Group and Toma As 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 Toma as are associated (or correlated) with Colt CZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colt CZ Group has no effect on the direction of Toma As i.e., Toma As and Colt CZ go up and down completely randomly.
Pair Corralation between Toma As and Colt CZ
Assuming the 90 days trading horizon Toma As is expected to generate 2.88 times less return on investment than Colt CZ. In addition to that, Toma As is 1.25 times more volatile than Colt CZ Group. It trades about 0.01 of its total potential returns per unit of risk. Colt CZ Group is currently generating about 0.05 per unit of volatility. If you would invest 50,274 in Colt CZ Group on August 24, 2024 and sell it today you would earn a total of 12,526 from holding Colt CZ Group or generate 24.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toma as vs. Colt CZ Group
Performance |
| Timeline |
| Toma as |
| Colt CZ Group |
Toma As and Colt CZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toma As and Colt CZ
The main advantage of trading using opposite Toma As and Colt CZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toma As position performs unexpectedly, Colt CZ 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 Colt CZ will offset losses from the drop in Colt CZ's long position.| Toma As vs. Raiffeisen Bank International | Toma As vs. Komercni Banka AS | Toma As vs. JT ARCH INVESTMENTS | Toma As vs. Moneta Money Bank |
| Colt CZ vs. Cez AS | Colt CZ vs. Komercni Banka AS | Colt CZ vs. Moneta Money Bank | Colt CZ 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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