Correlation Between Kofola CeskoSlovensko and Moneta Money

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

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

Diversification Opportunities for Kofola CeskoSlovensko and Moneta Money

0.88

Correlation Coefficient

Kofola CeskoSlovensko  Moneta Money

Very poor diversification

The 3 months correlation between Kofola and Moneta is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kofola CeskoSlovensko as 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 Kofola CeskoSlovensko 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 Kofola CeskoSlovensko as 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 Kofola CeskoSlovensko i.e., Kofola CeskoSlovensko and Moneta Money go up and down completely randomly.

Pair Corralation between Kofola CeskoSlovensko and Moneta Money

Assuming the 90 days trading horizon Kofola CeskoSlovensko as is expected to generate 1.09 times more return on investment than Moneta Money. However, Kofola CeskoSlovensko is 1.09 times more volatile than Moneta Money Bank. It trades about 0.31 of its potential returns per unit of risk. Moneta Money Bank is currently generating about 0.21 per unit of risk. If you would invest  29,227  in Kofola CeskoSlovensko as on August 30, 2024 and sell it today you would earn a total of  8,673  from holding Kofola CeskoSlovensko as or generate 29.67% return on investment over 90 days.

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

Kofola CeskoSlovensko as  vs.  Moneta Money Bank

Kofola CeskoSlovensko

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kofola CeskoSlovensko as are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kofola CeskoSlovensko reported solid returns over the last few months and may actually be approaching a breakup point.

Moneta Money Bank

Risk-Adjusted Performance

16 of 100

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 Kofola CeskoSlovensko and Moneta Money

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

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.