Correlation Between Echo Investment and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Polski Koncern 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 Polski Koncern 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 Polski Koncern Naftowy, you can compare the effects of market volatilities on Echo Investment and Polski Koncern 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 Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Polski Koncern.
Diversification Opportunities for Echo Investment and Polski Koncern
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Echo and Polski is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy 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 Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of Echo Investment i.e., Echo Investment and Polski Koncern go up and down completely randomly.
Pair Corralation between Echo Investment and Polski Koncern
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 0.98 times more return on investment than Polski Koncern. However, Echo Investment SA is 1.02 times less risky than Polski Koncern. It trades about 0.06 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about 0.01 per unit of risk. If you would invest 312.00 in Echo Investment SA on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Echo Investment SA or generate 44.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echo Investment SA vs. Polski Koncern Naftowy
Performance |
| Timeline |
| Echo Investment SA |
| Polski Koncern Naftowy |
Echo Investment and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Polski Koncern
The main advantage of trading using opposite Echo Investment and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern's long position.| Echo Investment vs. LSI Software SA | Echo Investment vs. Tower Investments SA | Echo Investment vs. Baked Games SA | Echo Investment vs. MW Trade SA |
| Polski Koncern vs. Asseco Business Solutions | Polski Koncern vs. Detalion Games SA | Polski Koncern vs. Asseco South Eastern | Polski Koncern vs. Movie Games 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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