Correlation Between Enter Air and Bank Handlowy
Can any of the company-specific risk be diversified away by investing in both Enter Air and Bank Handlowy 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 Enter Air and Bank Handlowy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and Bank Handlowy w, you can compare the effects of market volatilities on Enter Air and Bank Handlowy 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 Enter Air with a short position of Bank Handlowy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and Bank Handlowy.
Diversification Opportunities for Enter Air and Bank Handlowy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enter and Bank is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and Bank Handlowy w in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Handlowy w and Enter Air 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 Enter Air SA are associated (or correlated) with Bank Handlowy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Handlowy w has no effect on the direction of Enter Air i.e., Enter Air and Bank Handlowy go up and down completely randomly.
Pair Corralation between Enter Air and Bank Handlowy
Assuming the 90 days trading horizon Enter Air SA is expected to generate 1.52 times more return on investment than Bank Handlowy. However, Enter Air is 1.52 times more volatile than Bank Handlowy w. It trades about 0.06 of its potential returns per unit of risk. Bank Handlowy w is currently generating about 0.0 per unit of risk. If you would invest 4,467 in Enter Air SA on September 4, 2024 and sell it today you would earn a total of 1,483 from holding Enter Air SA or generate 33.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. Bank Handlowy w
Performance |
| Timeline |
| Enter Air SA |
| Bank Handlowy w |
Enter Air and Bank Handlowy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and Bank Handlowy
The main advantage of trading using opposite Enter Air and Bank Handlowy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, Bank Handlowy 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 Bank Handlowy will offset losses from the drop in Bank Handlowy's long position.| Enter Air vs. Banco Santander SA | Enter Air vs. UniCredit SpA | Enter Air vs. CEZ as | Enter Air vs. Polski Koncern Naftowy |
| Bank Handlowy vs. Movie Games SA | Bank Handlowy vs. PZ Cormay SA | Bank Handlowy vs. Enter Air SA | Bank Handlowy vs. Quantum Software 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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