Correlation Between Cez AS and SAB Finance

Can any of the company-specific risk be diversified away by investing in both Cez AS and SAB Finance 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 Cez AS and SAB Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cez AS and SAB Finance as, you can compare the effects of market volatilities on Cez AS and SAB Finance 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 Cez AS with a short position of SAB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cez AS and SAB Finance.

Diversification Opportunities for Cez AS and SAB Finance

-0.4

Correlation Coefficient

Cez AS  SAB Finance

Very good diversification

The 3 months correlation between Cez and SAB is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cez AS and SAB Finance as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Finance as and Cez 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 Cez AS are associated (or correlated) with SAB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Finance as has no effect on the direction of Cez AS i.e., Cez AS and SAB Finance go up and down completely randomly.

Pair Corralation between Cez AS and SAB Finance

Assuming the 90 days trading horizon Cez AS is expected to generate 1.14 times more return on investment than SAB Finance. However, Cez AS is 1.14 times more volatile than SAB Finance as. It trades about 0.22 of its potential returns per unit of risk. SAB Finance as is currently generating about -0.04 per unit of risk. If you would invest  86,500  in Cez AS on August 31, 2024 and sell it today you would earn a total of  10,500  from holding Cez AS or generate 12.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cez AS  vs.  SAB Finance as

Cez AS

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cez AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cez AS may actually be approaching a critical reversion point that can send shares even higher in December 2024.

SAB Finance as

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAB Finance as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SAB Finance is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cez AS and SAB Finance

The main advantage of trading using opposite Cez AS and SAB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cez AS position performs unexpectedly, SAB Finance 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 SAB Finance will offset losses from the drop in SAB Finance's long position.

The idea behind Cez AS and SAB Finance as pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.