Correlation Between Immobile and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Immobile and KGHM 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 Immobile and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immobile and KGHM Polska Miedz, you can compare the effects of market volatilities on Immobile and KGHM 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 Immobile with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immobile and KGHM Polska.
Diversification Opportunities for Immobile and KGHM Polska
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Immobile and KGHM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Immobile and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz and Immobile 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 Immobile are associated (or correlated) with KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Immobile i.e., Immobile and KGHM Polska go up and down completely randomly.
Pair Corralation between Immobile and KGHM Polska
Assuming the 90 days trading horizon Immobile is expected to under-perform the KGHM Polska. In addition to that, Immobile is 1.22 times more volatile than KGHM Polska Miedz. It trades about -0.06 of its total potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.06 per unit of volatility. If you would invest 10,672 in KGHM Polska Miedz on August 27, 2024 and sell it today you would earn a total of 2,378 from holding KGHM Polska Miedz or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immobile vs. KGHM Polska Miedz
Performance |
| Timeline |
| Immobile |
| KGHM Polska Miedz |
Immobile and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immobile and KGHM Polska
The main advantage of trading using opposite Immobile and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immobile position performs unexpectedly, KGHM 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.The idea behind Immobile and KGHM Polska Miedz pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| KGHM Polska vs. Marie Brizard Wine | KGHM Polska vs. Quantum Software SA | KGHM Polska vs. SOFTWARE MANSION SPOLKA | KGHM Polska vs. Mlk Foods Public |
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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