Correlation Between Cembra Money and Implenia

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

By analyzing existing cross correlation between Cembra Money Bank and Implenia AG, you can compare the effects of market volatilities on Cembra Money and Implenia 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 Cembra Money with a short position of Implenia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Implenia.

Diversification Opportunities for Cembra Money and Implenia

-0.36

Correlation Coefficient

Cembra Money  Implenia

Very good diversification

The 3 months correlation between Cembra and Implenia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Cembra Money 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 Cembra Money Bank are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Cembra Money i.e., Cembra Money and Implenia go up and down completely randomly.

Pair Corralation between Cembra Money and Implenia

Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.59 times more return on investment than Implenia. However, Cembra Money Bank is 1.68 times less risky than Implenia. It trades about 0.08 of its potential returns per unit of risk. Implenia AG is currently generating about 0.02 per unit of risk. If you would invest  7,865  in Cembra Money Bank on September 16, 2024 and sell it today you would earn a total of  335.00  from holding Cembra Money Bank or generate 4.26% return on investment over 90 days.

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

Cembra Money Bank  vs.  Implenia AG

Cembra Money Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Cembra Money is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Implenia AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Implenia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Cembra Money and Implenia

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

The idea behind Cembra Money Bank and Implenia AG 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.