Correlation Between Centrum Finansowe and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and KGHM Polska 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 Centrum Finansowe and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrum Finansowe Banku and KGHM Polska Miedz, you can compare the effects of market volatilities on Centrum Finansowe and KGHM Polska 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 Centrum Finansowe with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and KGHM Polska.
Diversification Opportunities for Centrum Finansowe and KGHM Polska
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrum and KGHM is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and KGHM Polska go up and down completely randomly.
Pair Corralation between Centrum Finansowe and KGHM Polska
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 1.13 times more return on investment than KGHM Polska. However, Centrum Finansowe is 1.13 times more volatile than KGHM Polska Miedz. It trades about 0.06 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.02 per unit of risk. If you would invest 308.00 in Centrum Finansowe Banku on September 13, 2024 and sell it today you would earn a total of 277.00 from holding Centrum Finansowe Banku or generate 89.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Centrum Finansowe Banku vs. KGHM Polska Miedz
Performance |
| Timeline |
| Centrum Finansowe Banku |
| KGHM Polska Miedz |
Centrum Finansowe and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrum Finansowe and KGHM Polska
The main advantage of trading using opposite Centrum Finansowe and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Centrum Finansowe vs. Carlson Investments SA | Centrum Finansowe vs. Asseco Business Solutions | Centrum Finansowe vs. Detalion Games SA | Centrum Finansowe vs. Asseco South Eastern |
| KGHM Polska vs. Gamedust SA | KGHM Polska vs. Intersport Polska SA | KGHM Polska vs. Inter Cars SA | KGHM Polska 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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