Correlation Between Cez AS and Moneta Money

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

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

Diversification Opportunities for Cez AS and Moneta Money

0.96

Correlation Coefficient

Cez AS  Moneta Money

Almost no diversification

The 3 months correlation between Cez and Moneta is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Cez AS and Moneta Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneta Money Bank 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 Moneta Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneta Money Bank has no effect on the direction of Cez AS i.e., Cez AS and Moneta Money go up and down completely randomly.

Pair Corralation between Cez AS and Moneta Money

Assuming the 90 days trading horizon Cez AS is expected to generate 1.25 times less return on investment than Moneta Money. But when comparing it to its historical volatility, Cez AS is 1.49 times less risky than Moneta Money. It trades about 0.2 of its potential returns per unit of risk. Moneta Money Bank is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10,799  in Moneta Money Bank on September 1, 2024 and sell it today you would earn a total of  1,501  from holding Moneta Money Bank or generate 13.9% return on investment over 90 days.

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

Cez AS  vs.  Moneta Money Bank

Cez AS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cez AS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cez AS may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Moneta Money Bank

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moneta Money Bank are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Moneta Money reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cez AS and Moneta Money

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

The idea behind Cez AS and Moneta 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.

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.