Correlation Between BANK HANDLOWY and Postal Savings
Can any of the company-specific risk be diversified away by investing in both BANK HANDLOWY and Postal Savings 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 BANK HANDLOWY and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK HANDLOWY and Postal Savings Bank, you can compare the effects of market volatilities on BANK HANDLOWY and Postal Savings 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 BANK HANDLOWY with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and Postal Savings.
Diversification Opportunities for BANK HANDLOWY and Postal Savings
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Postal is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and BANK HANDLOWY 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 BANK HANDLOWY are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of BANK HANDLOWY i.e., BANK HANDLOWY and Postal Savings go up and down completely randomly.
Pair Corralation between BANK HANDLOWY and Postal Savings
Assuming the 90 days trading horizon BANK HANDLOWY is expected to under-perform the Postal Savings. But the stock apears to be less risky and, when comparing its historical volatility, BANK HANDLOWY is 4.19 times less risky than Postal Savings. The stock trades about -0.36 of its potential returns per unit of risk. The Postal Savings Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Postal Savings Bank on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Postal Savings Bank or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK HANDLOWY vs. Postal Savings Bank
Performance |
| Timeline |
| BANK HANDLOWY |
| Postal Savings Bank |
BANK HANDLOWY and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK HANDLOWY and Postal Savings
The main advantage of trading using opposite BANK HANDLOWY and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK HANDLOWY position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| BANK HANDLOWY vs. LION ONE METALS | BANK HANDLOWY vs. Gamma Communications plc | BANK HANDLOWY vs. Computer And Technologies | BANK HANDLOWY vs. COMPUTERSHARE |
| Postal Savings vs. CAIXABANK UNADR 13 | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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