Correlation Between Komercni Banka and Photon Energy

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

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

Diversification Opportunities for Komercni Banka and Photon Energy

-0.83

Correlation Coefficient

Komercni Banka  Photon Energy

Pay attention - limited upside

The 3 months correlation between Komercni and Photon is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Komercni Banka AS and Photon Energy NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photon Energy NV and Komercni Banka 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 Komercni Banka AS are associated (or correlated) with Photon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photon Energy NV has no effect on the direction of Komercni Banka i.e., Komercni Banka and Photon Energy go up and down completely randomly.

Pair Corralation between Komercni Banka and Photon Energy

Assuming the 90 days trading horizon Komercni Banka AS is expected to generate 0.29 times more return on investment than Photon Energy. However, Komercni Banka AS is 3.42 times less risky than Photon Energy. It trades about 0.21 of its potential returns per unit of risk. Photon Energy NV is currently generating about -0.28 per unit of risk. If you would invest  76,350  in Komercni Banka AS on September 13, 2024 and sell it today you would earn a total of  7,750  from holding Komercni Banka AS or generate 10.15% return on investment over 90 days.

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

Komercni Banka AS  vs.  Photon Energy NV

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.

Photon Energy NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Photon Energy NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Komercni Banka and Photon Energy

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

The idea behind Komercni Banka AS and Photon Energy NV 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.