Correlation Between Comp SA and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Comp SA 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 Comp SA and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comp SA and KGHM Polska Miedz, you can compare the effects of market volatilities on Comp SA 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 Comp SA with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comp SA and KGHM Polska.
Diversification Opportunities for Comp SA and KGHM Polska
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Comp and KGHM is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Comp SA 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 Comp SA 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 Comp SA 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 Comp SA i.e., Comp SA and KGHM Polska go up and down completely randomly.
Pair Corralation between Comp SA and KGHM Polska
Assuming the 90 days trading horizon Comp SA is expected to generate 0.47 times more return on investment than KGHM Polska. However, Comp SA is 2.14 times less risky than KGHM Polska. It trades about 0.06 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.34 per unit of risk. If you would invest 11,450 in Comp SA on August 30, 2024 and sell it today you would earn a total of 150.00 from holding Comp SA or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comp SA vs. KGHM Polska Miedz
Performance |
| Timeline |
| Comp SA |
| KGHM Polska Miedz |
Comp SA and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comp SA and KGHM Polska
The main advantage of trading using opposite Comp SA and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comp SA 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.| Comp SA vs. Saule Technologies SA | Comp SA vs. Santander Bank Polska | Comp SA vs. Tower Investments SA | Comp SA vs. Noble Financials SA |
| KGHM Polska vs. Asseco Business Solutions | KGHM Polska vs. Detalion Games SA | KGHM Polska vs. CFI Holding SA | KGHM Polska vs. HM Inwest 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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