Correlation Between Dino Polska and Erbud SA
Can any of the company-specific risk be diversified away by investing in both Dino Polska and Erbud 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 Dino Polska and Erbud SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dino Polska SA and Erbud SA, you can compare the effects of market volatilities on Dino Polska and Erbud 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 Dino Polska with a short position of Erbud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dino Polska and Erbud SA.
Diversification Opportunities for Dino Polska and Erbud SA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dino and Erbud is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dino Polska SA and Erbud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erbud SA and Dino Polska 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 Dino Polska SA are associated (or correlated) with Erbud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erbud SA has no effect on the direction of Dino Polska i.e., Dino Polska and Erbud SA go up and down completely randomly.
Pair Corralation between Dino Polska and Erbud SA
Assuming the 90 days trading horizon Dino Polska SA is expected to generate 0.96 times more return on investment than Erbud SA. However, Dino Polska SA is 1.05 times less risky than Erbud SA. It trades about 0.03 of its potential returns per unit of risk. Erbud SA is currently generating about 0.02 per unit of risk. If you would invest 36,400 in Dino Polska SA on November 2, 2024 and sell it today you would earn a total of 8,200 from holding Dino Polska SA or generate 22.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dino Polska SA vs. Erbud SA
Performance |
| Timeline |
| Dino Polska SA |
| Erbud SA |
Dino Polska and Erbud SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dino Polska and Erbud SA
The main advantage of trading using opposite Dino Polska and Erbud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dino Polska position performs unexpectedly, Erbud 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 Erbud SA will offset losses from the drop in Erbud SA's long position.| Dino Polska vs. Quantum Software SA | Dino Polska vs. LSI Software SA | Dino Polska vs. GreenX Metals | Dino Polska vs. Creotech Instruments SA |
| Erbud SA vs. mBank SA | Erbud SA vs. Bank Millennium SA | Erbud SA vs. Globe Trade Centre | Erbud SA vs. Drago entertainment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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