Correlation Between TRAVEL + and Komercní Banka

Can any of the company-specific risk be diversified away by investing in both TRAVEL + 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 TRAVEL + and Komercní 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 + 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 TRAVEL + with a short position of Komercní Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Komercní Banka.

Diversification Opportunities for TRAVEL + and Komercní Banka

0.71

Correlation Coefficient

TRAVEL +  Komercní Banka

Poor diversification

The 3 months correlation between TRAVEL and Komercní is 0.71. 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 + 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 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 TRAVEL + i.e., TRAVEL + and Komercní Banka go up and down completely randomly.

Pair Corralation between TRAVEL + and Komercní Banka

Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 1.39 times more return on investment than Komercní Banka. However, TRAVEL + is 1.39 times more volatile than Komercn banka as. It trades about 0.15 of its potential returns per unit of risk. Komercn banka as is currently generating about 0.14 per unit of risk. If you would invest  4,218  in TRAVEL LEISURE DL 01 on October 5, 2024 and sell it today you would earn a total of  602.00  from holding TRAVEL LEISURE DL 01 or generate 14.27% 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

0 of 100

Good

Over the last 90 days TRAVEL LEISURE DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

Komercn banka as

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Komercn banka as has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Komercní Banka may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TRAVEL + and Komercní Banka

The main advantage of trading using opposite TRAVEL + and Komercní Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.