Correlation Between Komercni Banka and Cembra Money

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

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

Diversification Opportunities for Komercni Banka and Cembra Money

0.0

Correlation Coefficient

Komercni Banka  Cembra Money

Pay attention - limited upside

The 3 months correlation between Komercni and Cembra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Komercni Banka and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 are associated (or correlated) with Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Komercni Banka i.e., Komercni Banka and Cembra Money go up and down completely randomly.

Pair Corralation between Komercni Banka and Cembra Money

If you would invest  7,921  in Cembra Money Bank on September 17, 2024 and sell it today you would earn a total of  309.00  from holding Cembra Money Bank or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Komercni Banka  vs.  Cembra Money Bank

Komercni Banka

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Komercni Banka has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Komercni Banka is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 comparatively stable basic indicators, Cembra Money is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Komercni Banka and Cembra Money

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

The idea behind Komercni Banka and Cembra Money Bank 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.