Correlation Between CD PROJEKT and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both CD PROJEKT and Polski Koncern 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 CD PROJEKT and Polski Koncern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CD PROJEKT SA and Polski Koncern Naftowy, you can compare the effects of market volatilities on CD PROJEKT and Polski Koncern 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 CD PROJEKT with a short position of Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD PROJEKT and Polski Koncern.
Diversification Opportunities for CD PROJEKT and Polski Koncern
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDR and Polski is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CD PROJEKT SA and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy and CD PROJEKT 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 CD PROJEKT SA are associated (or correlated) with Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of CD PROJEKT i.e., CD PROJEKT and Polski Koncern go up and down completely randomly.
Pair Corralation between CD PROJEKT and Polski Koncern
Assuming the 90 days trading horizon CD PROJEKT SA is expected to generate 1.91 times more return on investment than Polski Koncern. However, CD PROJEKT is 1.91 times more volatile than Polski Koncern Naftowy. It trades about 0.39 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about 0.54 per unit of risk. If you would invest 18,730 in CD PROJEKT SA on October 21, 2024 and sell it today you would earn a total of 3,120 from holding CD PROJEKT SA or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CD PROJEKT SA vs. Polski Koncern Naftowy
Performance |
| Timeline |
| CD PROJEKT SA |
| Polski Koncern Naftowy |
CD PROJEKT and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CD PROJEKT and Polski Koncern
The main advantage of trading using opposite CD PROJEKT and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD PROJEKT position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern's long position.| CD PROJEKT vs. PMPG Polskie Media | CD PROJEKT vs. LSI Software SA | CD PROJEKT vs. Pyramid Games SA | CD PROJEKT vs. GreenX Metals |
| Polski Koncern vs. PZ Cormay SA | Polski Koncern vs. SOFTWARE MANSION SPOLKA | Polski Koncern vs. Santander Bank Polska | Polski Koncern vs. Centrum Finansowe Banku |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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