Correlation Between PG E and Komercní Banka

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

By analyzing existing cross correlation between PG E P6 and Komercn banka as, you can compare the effects of market volatilities on PG E and Komercní 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 PG E with a short position of Komercní Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of PG E and Komercní Banka.

Diversification Opportunities for PG E and Komercní Banka

-0.62

Correlation Coefficient

PG E  Komercní Banka

Excellent diversification

The 3 months correlation between PCG6 and Komercní is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding PG E P6 and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as and PG E 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 PG E P6 are associated (or correlated) with Komercní Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of PG E i.e., PG E and Komercní Banka go up and down completely randomly.

Pair Corralation between PG E and Komercní Banka

Assuming the 90 days trading horizon PG E P6 is expected to under-perform the Komercní Banka. But the stock apears to be less risky and, when comparing its historical volatility, PG E P6 is 1.08 times less risky than Komercní Banka. The stock trades about -0.01 of its potential returns per unit of risk. The Komercn banka as is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  3,346  in Komercn banka as on December 25, 2024 and sell it today you would earn a total of  1,004  from holding Komercn banka as or generate 30.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

PG E P6  vs.  Komercn banka as

PG E P6

Risk-Adjusted Performance

Very Weak

Over the last 90 days PG E P6 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, PG E is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Komercn banka as

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Komercn banka as are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Komercní Banka reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PG E and Komercní Banka

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

The idea behind PG E P6 and Komercn 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.