Correlation Between MT 1997 and Kofola CeskoSlovensko

Can any of the company-specific risk be diversified away by investing in both MT 1997 and Kofola CeskoSlovensko 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 MT 1997 and Kofola CeskoSlovensko into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MT 1997 AS and Kofola CeskoSlovensko as, you can compare the effects of market volatilities on MT 1997 and Kofola CeskoSlovensko 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 MT 1997 with a short position of Kofola CeskoSlovensko. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT 1997 and Kofola CeskoSlovensko.

Diversification Opportunities for MT 1997 and Kofola CeskoSlovensko

-0.74

Correlation Coefficient

MT 1997  Kofola CeskoSlovensko

Pay attention - limited upside

The 3 months correlation between KLIKY and Kofola is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding MT 1997 AS and Kofola CeskoSlovensko as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kofola CeskoSlovensko and MT 1997 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 MT 1997 AS are associated (or correlated) with Kofola CeskoSlovensko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kofola CeskoSlovensko has no effect on the direction of MT 1997 i.e., MT 1997 and Kofola CeskoSlovensko go up and down completely randomly.

Pair Corralation between MT 1997 and Kofola CeskoSlovensko

Assuming the 90 days trading horizon MT 1997 AS is expected to under-perform the Kofola CeskoSlovensko. But the stock apears to be less risky and, when comparing its historical volatility, MT 1997 AS is 1.0 times less risky than Kofola CeskoSlovensko. The stock trades about -0.08 of its potential returns per unit of risk. The Kofola CeskoSlovensko as is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  29,227  in Kofola CeskoSlovensko as on September 2, 2024 and sell it today you would earn a total of  8,773  from holding Kofola CeskoSlovensko as or generate 30.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

MT 1997 AS  vs.  Kofola CeskoSlovensko as

MT 1997 AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MT 1997 AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Kofola CeskoSlovensko

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kofola CeskoSlovensko as are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kofola CeskoSlovensko reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MT 1997 and Kofola CeskoSlovensko

The main advantage of trading using opposite MT 1997 and Kofola CeskoSlovensko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT 1997 position performs unexpectedly, Kofola CeskoSlovensko 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 Kofola CeskoSlovensko will offset losses from the drop in Kofola CeskoSlovensko's long position.

The idea behind MT 1997 AS and Kofola CeskoSlovensko 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..