Correlation Between HARDWARIO and Komercni Banka

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

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

Diversification Opportunities for HARDWARIO and Komercni Banka

0.49

Correlation Coefficient

HARDWARIO  Komercni Banka

Very weak diversification

The 3 months correlation between HARDWARIO and Komercni is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding HARDWARIO as and Komercni Banka AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercni Banka AS and HARDWARIO 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 HARDWARIO as are associated (or correlated) with Komercni Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercni Banka AS has no effect on the direction of HARDWARIO i.e., HARDWARIO and Komercni Banka go up and down completely randomly.

Pair Corralation between HARDWARIO and Komercni Banka

Assuming the 90 days trading horizon HARDWARIO is expected to generate 1.12 times less return on investment than Komercni Banka. In addition to that, HARDWARIO is 5.39 times more volatile than Komercni Banka AS. It trades about 0.04 of its total potential returns per unit of risk. Komercni Banka AS is currently generating about 0.21 per unit of volatility. If you would invest  76,900  in Komercni Banka AS on September 19, 2024 and sell it today you would earn a total of  8,100  from holding Komercni Banka AS or generate 10.53% return on investment over 90 days.

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

HARDWARIO as  vs.  Komercni Banka AS

HARDWARIO as

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HARDWARIO as are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HARDWARIO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Komercni Banka AS

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Komercni Banka AS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Komercni Banka may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with HARDWARIO and Komercni Banka

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

The idea behind HARDWARIO as and Komercni Banka 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.