Correlation Between ECC Games and Intersport Polska
Can any of the company-specific risk be diversified away by investing in both ECC Games and Intersport 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 ECC Games and Intersport Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECC Games SA and Intersport Polska SA, you can compare the effects of market volatilities on ECC Games and Intersport 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 ECC Games with a short position of Intersport Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECC Games and Intersport Polska.
Diversification Opportunities for ECC Games and Intersport Polska
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECC and Intersport is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ECC Games SA and Intersport Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intersport Polska and ECC Games 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 ECC Games SA are associated (or correlated) with Intersport Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intersport Polska has no effect on the direction of ECC Games i.e., ECC Games and Intersport Polska go up and down completely randomly.
Pair Corralation between ECC Games and Intersport Polska
Assuming the 90 days trading horizon ECC Games SA is expected to generate 1.17 times more return on investment than Intersport Polska. However, ECC Games is 1.17 times more volatile than Intersport Polska SA. It trades about -0.01 of its potential returns per unit of risk. Intersport Polska SA is currently generating about -0.03 per unit of risk. If you would invest 68.00 in ECC Games SA on September 14, 2024 and sell it today you would lose (21.00) from holding ECC Games SA or give up 30.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.9% |
| Values | Daily Returns |
ECC Games SA vs. Intersport Polska SA
Performance |
| Timeline |
| ECC Games SA |
| Intersport Polska |
ECC Games and Intersport Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECC Games and Intersport Polska
The main advantage of trading using opposite ECC Games and Intersport Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECC Games position performs unexpectedly, Intersport 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 Intersport Polska will offset losses from the drop in Intersport Polska's long position.| ECC Games vs. Intersport Polska SA | ECC Games vs. Marie Brizard Wine | ECC Games vs. MW Trade SA | ECC Games vs. mBank SA |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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