Correlation Between Kofola CeskoSlovensko and Prabos Plus

Can any of the company-specific risk be diversified away by investing in both Kofola CeskoSlovensko and Prabos Plus 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 Prabos Plus 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 Prabos Plus as, you can compare the effects of market volatilities on Kofola CeskoSlovensko and Prabos Plus 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 Prabos Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kofola CeskoSlovensko and Prabos Plus.

Diversification Opportunities for Kofola CeskoSlovensko and Prabos Plus

-0.12

Correlation Coefficient

Kofola CeskoSlovensko  Prabos Plus

Good diversification

The 3 months correlation between Kofola and Prabos is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kofola CeskoSlovensko as and Prabos Plus as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prabos Plus as 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 Prabos Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prabos Plus as has no effect on the direction of Kofola CeskoSlovensko i.e., Kofola CeskoSlovensko and Prabos Plus go up and down completely randomly.

Pair Corralation between Kofola CeskoSlovensko and Prabos Plus

Assuming the 90 days trading horizon Kofola CeskoSlovensko as is expected to generate 0.63 times more return on investment than Prabos Plus. However, Kofola CeskoSlovensko as is 1.6 times less risky than Prabos Plus. It trades about 0.3 of its potential returns per unit of risk. Prabos Plus as is currently generating about 0.02 per unit of risk. If you would invest  29,227  in Kofola CeskoSlovensko as on September 1, 2024 and sell it today you would earn a total of  8,773  from holding Kofola CeskoSlovensko as or generate 30.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Kofola CeskoSlovensko as  vs.  Prabos Plus as

Kofola CeskoSlovensko

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kofola CeskoSlovensko as are ranked lower than 23 (%) 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.

Prabos Plus as

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prabos Plus as are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Prabos Plus 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 Kofola CeskoSlovensko and Prabos Plus

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

The idea behind Kofola CeskoSlovensko as and Prabos Plus 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.