Correlation Between Echo Investment and Jastrzebska Spotka
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Jastrzebska Spotka 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 Echo Investment and Jastrzebska Spotka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echo Investment SA and Jastrzebska Spotka Weglowa, you can compare the effects of market volatilities on Echo Investment and Jastrzebska Spotka 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 Echo Investment with a short position of Jastrzebska Spotka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Jastrzebska Spotka.
Diversification Opportunities for Echo Investment and Jastrzebska Spotka
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Echo and Jastrzebska is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Jastrzebska Spotka Weglowa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jastrzebska Spotka and Echo Investment 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 Echo Investment SA are associated (or correlated) with Jastrzebska Spotka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jastrzebska Spotka has no effect on the direction of Echo Investment i.e., Echo Investment and Jastrzebska Spotka go up and down completely randomly.
Pair Corralation between Echo Investment and Jastrzebska Spotka
Assuming the 90 days trading horizon Echo Investment SA is expected to under-perform the Jastrzebska Spotka. But the stock apears to be less risky and, when comparing its historical volatility, Echo Investment SA is 2.36 times less risky than Jastrzebska Spotka. The stock trades about -0.44 of its potential returns per unit of risk. The Jastrzebska Spotka Weglowa is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,180 in Jastrzebska Spotka Weglowa on November 4, 2024 and sell it today you would earn a total of 140.00 from holding Jastrzebska Spotka Weglowa or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echo Investment SA vs. Jastrzebska Spotka Weglowa
Performance |
| Timeline |
| Echo Investment SA |
| Jastrzebska Spotka |
Echo Investment and Jastrzebska Spotka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Jastrzebska Spotka
The main advantage of trading using opposite Echo Investment and Jastrzebska Spotka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Jastrzebska Spotka 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 Jastrzebska Spotka will offset losses from the drop in Jastrzebska Spotka's long position.| Echo Investment vs. Santander Bank Polska | Echo Investment vs. Asseco South Eastern | Echo Investment vs. Vercom SA | Echo Investment vs. CFI Holding SA |
| Jastrzebska Spotka vs. Quantum Software SA | Jastrzebska Spotka vs. UniCredit SpA | Jastrzebska Spotka vs. Bank Millennium SA | Jastrzebska Spotka vs. Alior Bank 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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