Correlation Between Enea SA and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both Enea SA 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 Enea SA and Polski Koncern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enea SA and Polski Koncern Naftowy, you can compare the effects of market volatilities on Enea SA 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 Enea SA with a short position of Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea SA and Polski Koncern.
Diversification Opportunities for Enea SA and Polski Koncern
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enea and Polski is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Enea 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 Enea 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 Enea 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 Enea SA i.e., Enea SA and Polski Koncern go up and down completely randomly.
Pair Corralation between Enea SA and Polski Koncern
Assuming the 90 days trading horizon Enea SA is expected to generate 1.4 times more return on investment than Polski Koncern. However, Enea SA is 1.4 times more volatile than Polski Koncern Naftowy. It trades about 0.07 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about -0.06 per unit of risk. If you would invest 1,027 in Enea SA on August 28, 2024 and sell it today you would earn a total of 173.00 from holding Enea SA or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enea SA vs. Polski Koncern Naftowy
Performance |
| Timeline |
| Enea SA |
| Polski Koncern Naftowy |
Enea SA and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enea SA and Polski Koncern
The main advantage of trading using opposite Enea SA and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea SA 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.| Enea SA vs. Asseco South Eastern | Enea SA vs. Vercom SA | Enea SA vs. Gobarto SA | Enea SA vs. Beta mWIG40TR Portfelowy |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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