Correlation Between CEZ As and Powszechny Zaklad
Can any of the company-specific risk be diversified away by investing in both CEZ As and Powszechny Zaklad 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 Powszechny Zaklad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and Powszechny Zaklad Ubezpieczen, you can compare the effects of market volatilities on CEZ As and Powszechny Zaklad 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 Powszechny Zaklad. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Powszechny Zaklad.
Diversification Opportunities for CEZ As and Powszechny Zaklad
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEZ and Powszechny is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Powszechny Zaklad Ubezpieczen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechny Zaklad 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 Powszechny Zaklad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechny Zaklad has no effect on the direction of CEZ As i.e., CEZ As and Powszechny Zaklad go up and down completely randomly.
Pair Corralation between CEZ As and Powszechny Zaklad
Assuming the 90 days trading horizon CEZ as is expected to generate 1.12 times more return on investment than Powszechny Zaklad. However, CEZ As is 1.12 times more volatile than Powszechny Zaklad Ubezpieczen. It trades about 0.1 of its potential returns per unit of risk. Powszechny Zaklad Ubezpieczen is currently generating about 0.08 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 Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CEZ as vs. Powszechny Zaklad Ubezpieczen
Performance |
Timeline |
CEZ as |
Powszechny Zaklad |
CEZ As and Powszechny Zaklad Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CEZ As and Powszechny Zaklad
The main advantage of trading using opposite CEZ As and Powszechny Zaklad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As position performs unexpectedly, Powszechny Zaklad 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 Powszechny Zaklad will offset losses from the drop in Powszechny Zaklad'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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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