Correlation Between CEZ A and Alternus Energy

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

By analyzing existing cross correlation between CEZ A S and Alternus Energy Group, you can compare the effects of market volatilities on CEZ A and Alternus Energy 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 A with a short position of Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ A and Alternus Energy.

Diversification Opportunities for CEZ A and Alternus Energy

0.0

Correlation Coefficient

CEZ A  Alternus Energy

Pay attention - limited upside

The 3 months correlation between CEZ and Alternus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CEZ A S and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group and CEZ A 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 A S are associated (or correlated) with Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of CEZ A i.e., CEZ A and Alternus Energy go up and down completely randomly.

Pair Corralation between CEZ A and Alternus Energy

If you would invest  52.00  in Alternus Energy Group on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Alternus Energy Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

CEZ A S  vs.  Alternus Energy Group

CEZ A S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEZ A S has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CEZ A is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alternus Energy Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CEZ A and Alternus Energy

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

The idea behind CEZ A S and Alternus Energy Group 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.