Correlation Between Bank Handlowy and MW Trade
Can any of the company-specific risk be diversified away by investing in both Bank Handlowy and MW Trade 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 MW Trade 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 MW Trade SA, you can compare the effects of market volatilities on Bank Handlowy and MW Trade 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 MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Handlowy and MW Trade.
Diversification Opportunities for Bank Handlowy and MW Trade
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and MWT is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank Handlowy w and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade 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 MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Bank Handlowy i.e., Bank Handlowy and MW Trade go up and down completely randomly.
Pair Corralation between Bank Handlowy and MW Trade
Assuming the 90 days trading horizon Bank Handlowy w is expected to generate 0.59 times more return on investment than MW Trade. However, Bank Handlowy w is 1.69 times less risky than MW Trade. It trades about -0.11 of its potential returns per unit of risk. MW Trade SA is currently generating about -0.46 per unit of risk. If you would invest 9,050 in Bank Handlowy w on September 5, 2024 and sell it today you would lose (250.00) from holding Bank Handlowy w or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Handlowy w vs. MW Trade SA
Performance |
| Timeline |
| Bank Handlowy w |
| MW Trade SA |
Bank Handlowy and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Handlowy and MW Trade
The main advantage of trading using opposite Bank Handlowy and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Handlowy position performs unexpectedly, MW Trade 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 MW Trade will offset losses from the drop in MW Trade's long position.| Bank Handlowy vs. MW Trade SA | Bank Handlowy vs. LSI Software SA | Bank Handlowy vs. Road Studio SA | Bank Handlowy vs. mBank SA |
| MW Trade vs. CI Games SA | MW Trade vs. BNP Paribas Bank | MW Trade vs. Varsav Game Studios | MW Trade vs. mBank 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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