Correlation Between TRAVEL LEISURE and Komercn Banka

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

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Komercn banka as, you can compare the effects of market volatilities on TRAVEL LEISURE and Komercn 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 TRAVEL LEISURE with a short position of Komercn Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL LEISURE and Komercn Banka.

Diversification Opportunities for TRAVEL LEISURE and Komercn Banka

0.74

Correlation Coefficient

TRAVEL LEISURE  Komercn Banka

Poor diversification

The 3 months correlation between TRAVEL and Komercn is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 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 TRAVEL LEISURE 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 TRAVEL LEISURE DL 01 are associated (or correlated) with Komercn 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 TRAVEL LEISURE i.e., TRAVEL LEISURE and Komercn Banka go up and down completely randomly.

Pair Corralation between TRAVEL LEISURE and Komercn Banka

Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to under-perform the Komercn Banka. But the stock apears to be less risky and, when comparing its historical volatility, TRAVEL LEISURE DL 01 is 1.12 times less risky than Komercn Banka. The stock trades about -0.14 of its potential returns per unit of risk. The Komercn banka as is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,184  in Komercn banka as on September 23, 2024 and sell it today you would earn a total of  154.00  from holding Komercn banka as or generate 4.84% return on investment over 90 days.

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

TRAVEL LEISURE DL 01  vs.  Komercn banka as

TRAVEL LEISURE DL

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRAVEL LEISURE reported solid returns over the last few months and may actually be approaching a breakup point.

Komercn banka as

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Komercn banka as are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Komercn Banka may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TRAVEL LEISURE and Komercn Banka

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

The idea behind TRAVEL LEISURE DL 01 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.