Correlation Between FIXEDzone and Komercni Banka

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

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

Diversification Opportunities for FIXEDzone and Komercni Banka

-0.51

Correlation Coefficient

FIXEDzone  Komercni Banka

Excellent diversification

The 3 months correlation between FIXEDzone and Komercni is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding FIXEDzone as and Komercni Banka AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercni Banka AS and FIXEDzone 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 FIXEDzone as are associated (or correlated) with Komercni Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercni Banka AS has no effect on the direction of FIXEDzone i.e., FIXEDzone and Komercni Banka go up and down completely randomly.

Pair Corralation between FIXEDzone and Komercni Banka

Assuming the 90 days trading horizon FIXEDzone as is expected to under-perform the Komercni Banka. In addition to that, FIXEDzone is 2.48 times more volatile than Komercni Banka AS. It trades about -0.06 of its total potential returns per unit of risk. Komercni Banka AS is currently generating about 0.12 per unit of volatility. If you would invest  77,350  in Komercni Banka AS on September 1, 2024 and sell it today you would earn a total of  4,150  from holding Komercni Banka AS or generate 5.37% return on investment over 90 days.

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

FIXEDzone as  vs.  Komercni Banka AS

FIXEDzone as

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIXEDzone as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FIXEDzone is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Komercni Banka AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Komercni Banka AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Komercni Banka is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with FIXEDzone and Komercni Banka

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

The idea behind FIXEDzone as and Komercni Banka AS 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.