Correlation Between SIDETRADE and Komercní Banka

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

By analyzing existing cross correlation between SIDETRADE EO 1 and Komercn banka as, you can compare the effects of market volatilities on SIDETRADE and Komercní 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 SIDETRADE with a short position of Komercní Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and Komercní Banka.

Diversification Opportunities for SIDETRADE and Komercní Banka

-0.2

Correlation Coefficient

SIDETRADE  Komercní Banka

Good diversification

The 3 months correlation between SIDETRADE and Komercní is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as and SIDETRADE 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 SIDETRADE EO 1 are associated (or correlated) with Komercní Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of SIDETRADE i.e., SIDETRADE and Komercní Banka go up and down completely randomly.

Pair Corralation between SIDETRADE and Komercní Banka

Assuming the 90 days horizon SIDETRADE is expected to generate 7.36 times less return on investment than Komercní Banka. But when comparing it to its historical volatility, SIDETRADE EO 1 is 1.06 times less risky than Komercní Banka. It trades about 0.02 of its potential returns per unit of risk. Komercn banka as is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,200  in Komercn banka as on October 7, 2024 and sell it today you would earn a total of  180.00  from holding Komercn banka as or generate 5.62% return on investment over 90 days.

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

SIDETRADE EO 1  vs.  Komercn banka as

SIDETRADE EO 1

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days SIDETRADE EO 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SIDETRADE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Komercn banka as

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Komercn banka as are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Komercní Banka may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SIDETRADE and Komercní Banka

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

The idea behind SIDETRADE EO 1 and Komercn 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.