Correlation Between Colt CZ and Moneta Money

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

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

Diversification Opportunities for Colt CZ and Moneta Money

0.86

Correlation Coefficient

Colt CZ  Moneta Money

Very poor diversification

The 3 months correlation between Colt and Moneta is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Colt CZ Group 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 Colt CZ 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 Colt CZ Group 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 Colt CZ i.e., Colt CZ and Moneta Money go up and down completely randomly.

Pair Corralation between Colt CZ and Moneta Money

Assuming the 90 days trading horizon Colt CZ is expected to generate 1.64 times less return on investment than Moneta Money. But when comparing it to its historical volatility, Colt CZ Group is 1.46 times less risky than Moneta Money. It trades about 0.19 of its potential returns per unit of risk. Moneta Money Bank is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  12,380  in Moneta Money Bank on December 30, 2024 and sell it today you would earn a total of  2,520  from holding Moneta Money Bank or generate 20.36% return on investment over 90 days.

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

Colt CZ Group  vs.  Moneta Money Bank

Colt CZ Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Colt CZ Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Colt CZ may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Moneta Money Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moneta Money Bank are ranked lower than 16 (%) 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 Colt CZ and Moneta Money

The main advantage of trading using opposite Colt CZ and Moneta Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colt CZ 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 Colt CZ Group 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.