Correlation Between 11 Bit and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both 11 Bit and KGHM Polska 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 11 Bit and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 11 bit studios and KGHM Polska Miedz, you can compare the effects of market volatilities on 11 Bit and KGHM Polska 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 11 Bit with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of 11 Bit and KGHM Polska.
Diversification Opportunities for 11 Bit and KGHM Polska
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 11B and KGHM is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding 11 bit studios and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz and 11 Bit 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 11 bit studios are associated (or correlated) with KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of 11 Bit i.e., 11 Bit and KGHM Polska go up and down completely randomly.
Pair Corralation between 11 Bit and KGHM Polska
Assuming the 90 days trading horizon 11 bit studios is expected to generate 1.48 times more return on investment than KGHM Polska. However, 11 Bit is 1.48 times more volatile than KGHM Polska Miedz. It trades about 0.18 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.19 per unit of risk. If you would invest 17,720 in 11 bit studios on November 3, 2024 and sell it today you would earn a total of 1,680 from holding 11 bit studios or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
11 bit studios vs. KGHM Polska Miedz
Performance |
| Timeline |
| 11 bit studios |
| KGHM Polska Miedz |
11 Bit and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 11 Bit and KGHM Polska
The main advantage of trading using opposite 11 Bit and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 11 Bit position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| 11 Bit vs. PZ Cormay SA | 11 Bit vs. Santander Bank Polska | 11 Bit vs. Alior Bank SA | 11 Bit vs. BNP Paribas Bank |
| KGHM Polska vs. ING Bank lski | KGHM Polska vs. SOFTWARE MANSION SPOLKA | KGHM Polska vs. Igoria Trade SA | KGHM Polska vs. UniCredit SpA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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