Correlation Between Allegroeu and PKP Cargo
Can any of the company-specific risk be diversified away by investing in both Allegroeu and PKP Cargo 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 Allegroeu and PKP Cargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegroeu SA and PKP Cargo SA, you can compare the effects of market volatilities on Allegroeu and PKP Cargo 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 Allegroeu with a short position of PKP Cargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and PKP Cargo.
Diversification Opportunities for Allegroeu and PKP Cargo
Very poor diversification
The 3 months correlation between Allegroeu and PKP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Allegroeu SA and PKP Cargo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKP Cargo SA and Allegroeu 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 Allegroeu SA are associated (or correlated) with PKP Cargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKP Cargo SA has no effect on the direction of Allegroeu i.e., Allegroeu and PKP Cargo go up and down completely randomly.
Pair Corralation between Allegroeu and PKP Cargo
Assuming the 90 days trading horizon Allegroeu SA is expected to generate 1.07 times more return on investment than PKP Cargo. However, Allegroeu is 1.07 times more volatile than PKP Cargo SA. It trades about -0.31 of its potential returns per unit of risk. PKP Cargo SA is currently generating about -0.34 per unit of risk. If you would invest 3,553 in Allegroeu SA on August 30, 2024 and sell it today you would lose (658.00) from holding Allegroeu SA or give up 18.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegroeu SA vs. PKP Cargo SA
Performance |
| Timeline |
| Allegroeu SA |
| PKP Cargo SA |
Allegroeu and PKP Cargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegroeu and PKP Cargo
The main advantage of trading using opposite Allegroeu and PKP Cargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegroeu position performs unexpectedly, PKP Cargo 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 PKP Cargo will offset losses from the drop in PKP Cargo's long position.| Allegroeu vs. Movie Games SA | Allegroeu vs. GreenX Metals | Allegroeu vs. Intersport Polska SA | Allegroeu vs. Echo Investment SA |
| PKP Cargo vs. Banco Santander SA | PKP Cargo vs. UniCredit SpA | PKP Cargo vs. CEZ as | PKP Cargo vs. Polski Koncern Naftowy |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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