Correlation Between CEZ As and E Shopping
Can any of the company-specific risk be diversified away by investing in both CEZ As and E Shopping 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 E Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and E shopping Group SA, you can compare the effects of market volatilities on CEZ As and E Shopping 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 E Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and E Shopping.
Diversification Opportunities for CEZ As and E Shopping
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CEZ and ESG is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and E shopping Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E shopping Group 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 E Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E shopping Group has no effect on the direction of CEZ As i.e., CEZ As and E Shopping go up and down completely randomly.
Pair Corralation between CEZ As and E Shopping
Assuming the 90 days trading horizon CEZ as is expected to generate 0.25 times more return on investment than E Shopping. However, CEZ as is 4.03 times less risky than E Shopping. It trades about 0.1 of its potential returns per unit of risk. E shopping Group SA is currently generating about -0.16 per unit of risk. If you would invest 14,560 in CEZ as on September 26, 2024 and sell it today you would earn a total of 1,620 from holding CEZ as or generate 11.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 85.48% |
Values | Daily Returns |
CEZ as vs. E shopping Group SA
Performance |
Timeline |
CEZ as |
E shopping Group |
CEZ As and E Shopping Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CEZ As and E Shopping
The main advantage of trading using opposite CEZ As and E Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, E Shopping 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 E Shopping will offset losses from the drop in E Shopping's long position.CEZ As vs. True Games Syndicate | CEZ As vs. VR Factory Games | CEZ As vs. Echo Investment SA | CEZ As vs. TEN SQUARE GAMES |
E Shopping vs. Banco Santander SA | E Shopping vs. UniCredit SpA | E Shopping vs. CEZ as | E Shopping vs. Polski Koncern Naftowy |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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