Correlation Between Expat Czech and Expat Slovakia

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

By analyzing existing cross correlation between Expat Czech PX and Expat Slovakia Sax, you can compare the effects of market volatilities on Expat Czech and Expat Slovakia 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 Expat Czech with a short position of Expat Slovakia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expat Czech and Expat Slovakia.

Diversification Opportunities for Expat Czech and Expat Slovakia

-0.63

Correlation Coefficient

Expat Czech  Expat Slovakia

Excellent diversification

The 3 months correlation between Expat and Expat is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Expat Czech PX and Expat Slovakia Sax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Slovakia Sax and Expat Czech 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 Expat Czech PX are associated (or correlated) with Expat Slovakia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Slovakia Sax has no effect on the direction of Expat Czech i.e., Expat Czech and Expat Slovakia go up and down completely randomly.

Pair Corralation between Expat Czech and Expat Slovakia

If you would invest  149.00  in Expat Czech PX on October 23, 2024 and sell it today you would earn a total of  8.00  from holding Expat Czech PX or generate 5.37% return on investment over 90 days.

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

Expat Czech PX  vs.  Expat Slovakia Sax

Expat Czech PX

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Czech PX are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Expat Czech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Expat Slovakia Sax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expat Slovakia Sax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Expat Slovakia is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Expat Czech and Expat Slovakia

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

The idea behind Expat Czech PX and Expat Slovakia Sax 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.