Correlation Between Cez AS and FIXEDzone

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

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

Diversification Opportunities for Cez AS and FIXEDzone

0.28

Correlation Coefficient

Cez AS  FIXEDzone

Modest diversification

The 3 months correlation between Cez and FIXEDzone is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cez AS and FIXEDzone as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIXEDzone as and Cez AS 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 Cez AS are associated (or correlated) with FIXEDzone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIXEDzone as has no effect on the direction of Cez AS i.e., Cez AS and FIXEDzone go up and down completely randomly.

Pair Corralation between Cez AS and FIXEDzone

Assuming the 90 days trading horizon Cez AS is expected to generate 0.27 times more return on investment than FIXEDzone. However, Cez AS is 3.66 times less risky than FIXEDzone. It trades about 0.22 of its potential returns per unit of risk. FIXEDzone as is currently generating about 0.0 per unit of risk. If you would invest  95,700  in Cez AS on December 30, 2024 and sell it today you would earn a total of  17,000  from holding Cez AS or generate 17.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Cez AS  vs.  FIXEDzone as

Cez AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cez AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cez AS reported solid returns over the last few months and may actually be approaching a breakup point.

FIXEDzone as

Risk-Adjusted Performance

Very Weak

Over the last 90 days FIXEDzone as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FIXEDzone is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cez AS and FIXEDzone

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

The idea behind Cez AS and FIXEDzone 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.