Correlation Between Bank Handlowy and KCI SA
Can any of the company-specific risk be diversified away by investing in both Bank Handlowy and KCI SA 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 KCI SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Handlowy w and KCI SA, you can compare the effects of market volatilities on Bank Handlowy and KCI SA 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 KCI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Handlowy and KCI SA.
Diversification Opportunities for Bank Handlowy and KCI SA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and KCI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank Handlowy w and KCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCI SA 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 w are associated (or correlated) with KCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCI SA has no effect on the direction of Bank Handlowy i.e., Bank Handlowy and KCI SA go up and down completely randomly.
Pair Corralation between Bank Handlowy and KCI SA
Assuming the 90 days trading horizon Bank Handlowy w is expected to under-perform the KCI SA. But the stock apears to be less risky and, when comparing its historical volatility, Bank Handlowy w is 1.08 times less risky than KCI SA. The stock trades about -0.16 of its potential returns per unit of risk. The KCI SA is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 80.00 in KCI SA on September 4, 2024 and sell it today you would lose (2.00) from holding KCI SA or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Handlowy w vs. KCI SA
Performance |
| Timeline |
| Bank Handlowy w |
| KCI SA |
Bank Handlowy and KCI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Handlowy and KCI SA
The main advantage of trading using opposite Bank Handlowy and KCI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Handlowy position performs unexpectedly, KCI SA 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 KCI SA will offset losses from the drop in KCI SA's long position.| Bank Handlowy vs. Movie Games SA | Bank Handlowy vs. PZ Cormay SA | Bank Handlowy vs. Enter Air SA | Bank Handlowy vs. Quantum Software SA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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