Correlation Between BIST Electricity and PX Prague
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By analyzing existing cross correlation between BIST Electricity and PX Prague Stock, you can compare the effects of market volatilities on BIST Electricity and PX Prague 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 BIST Electricity with a short position of PX Prague. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIST Electricity and PX Prague.
Diversification Opportunities for BIST Electricity and PX Prague
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BIST and PX Prague is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BIST Electricity and PX Prague Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PX Prague Stock and BIST Electricity 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 BIST Electricity are associated (or correlated) with PX Prague. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PX Prague Stock has no effect on the direction of BIST Electricity i.e., BIST Electricity and PX Prague go up and down completely randomly.
Pair Corralation between BIST Electricity and PX Prague
Assuming the 90 days trading horizon BIST Electricity is expected to generate 3.72 times more return on investment than PX Prague. However, BIST Electricity is 3.72 times more volatile than PX Prague Stock. It trades about 0.53 of its potential returns per unit of risk. PX Prague Stock is currently generating about 0.19 per unit of risk. If you would invest 52,440 in BIST Electricity on February 4, 2024 and sell it today you would earn a total of 8,652 from holding BIST Electricity or generate 16.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 85.71% |
Values | Daily Returns |
BIST Electricity vs. PX Prague Stock
Performance |
Timeline |
BIST Electricity and PX Prague Volatility Contrast
Predicted Return Density |
Returns |
BIST Electricity
Pair trading matchups for BIST Electricity
PX Prague Stock
Pair trading matchups for PX Prague
Pair Trading with BIST Electricity and PX Prague
The main advantage of trading using opposite BIST Electricity and PX Prague positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIST Electricity position performs unexpectedly, PX Prague 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 PX Prague will offset losses from the drop in PX Prague's long position.BIST Electricity vs. Koza Anadolu Metal | BIST Electricity vs. Cuhadaroglu Metal Sanayi | BIST Electricity vs. ICBC Turkey Bank | BIST Electricity vs. Gentas Genel Metal |
PX Prague vs. Komercni Banka AS | PX Prague vs. Erste Group Bank | PX Prague vs. Raiffeisen Bank International | PX Prague vs. UNIQA Insurance Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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