Correlation Between Cembra Money and Mobilezone Holding

Can any of the company-specific risk be diversified away by investing in both Cembra Money and Mobilezone Holding 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 Mobilezone Holding 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 mobilezone holding AG, you can compare the effects of market volatilities on Cembra Money and Mobilezone Holding 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 Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Mobilezone Holding.

Diversification Opportunities for Cembra Money and Mobilezone Holding

0.95

Correlation Coefficient

Cembra Money  Mobilezone Holding

Almost no diversification

The 3 months correlation between Cembra and Mobilezone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding 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 Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of Cembra Money i.e., Cembra Money and Mobilezone Holding go up and down completely randomly.

Pair Corralation between Cembra Money and Mobilezone Holding

Assuming the 90 days trading horizon Cembra Money is expected to generate 1.07 times less return on investment than Mobilezone Holding. But when comparing it to its historical volatility, Cembra Money Bank is 1.01 times less risky than Mobilezone Holding. It trades about 0.25 of its potential returns per unit of risk. mobilezone holding AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,052  in mobilezone holding AG on December 27, 2024 and sell it today you would earn a total of  260.00  from holding mobilezone holding AG or generate 24.71% return on investment over 90 days.

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

Cembra Money Bank  vs.  mobilezone holding AG

Cembra Money Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cembra Money unveiled solid returns over the last few months and may actually be approaching a breakup point.

mobilezone holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in mobilezone holding AG are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Mobilezone Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cembra Money and Mobilezone Holding

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

The idea behind Cembra Money Bank and mobilezone holding 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.