Correlation Between CEZ As and Poznanska Korporacja

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

By analyzing existing cross correlation between CEZ as and Poznanska Korporacja Budowlana, you can compare the effects of market volatilities on CEZ As and Poznanska Korporacja 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 Poznanska Korporacja. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and Poznanska Korporacja.

Diversification Opportunities for CEZ As and Poznanska Korporacja

0.35

Correlation Coefficient

CEZ As  Poznanska Korporacja

Weak diversification

The 3 months correlation between CEZ and Poznanska is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as and Poznanska Korporacja Budowlana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poznanska Korporacja 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 Poznanska Korporacja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poznanska Korporacja has no effect on the direction of CEZ As i.e., CEZ As and Poznanska Korporacja go up and down completely randomly.

Pair Corralation between CEZ As and Poznanska Korporacja

Assuming the 90 days trading horizon CEZ as is expected to generate 0.87 times more return on investment than Poznanska Korporacja. However, CEZ as is 1.15 times less risky than Poznanska Korporacja. It trades about 0.14 of its potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about 0.07 per unit of risk. If you would invest  16,170  in CEZ as on December 30, 2024 and sell it today you would earn a total of  2,710  from holding CEZ as or generate 16.76% return on investment over 90 days.

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

CEZ as  vs.  Poznanska Korporacja Budowlana

CEZ as

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CEZ as are ranked lower than 10 (%) 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.

Poznanska Korporacja

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Poznanska Korporacja Budowlana are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Poznanska Korporacja may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CEZ As and Poznanska Korporacja

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

The idea behind CEZ as and Poznanska Korporacja Budowlana 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.