Correlation Between Intersport Polska and MBank SA
Can any of the company-specific risk be diversified away by investing in both Intersport Polska and MBank SA 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 Intersport Polska and MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intersport Polska SA and mBank SA, you can compare the effects of market volatilities on Intersport Polska and MBank SA 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 Intersport Polska with a short position of MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intersport Polska and MBank SA.
Diversification Opportunities for Intersport Polska and MBank SA
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intersport and MBank is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA and Intersport Polska 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 Intersport Polska SA are associated (or correlated) with MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of Intersport Polska i.e., Intersport Polska and MBank SA go up and down completely randomly.
Pair Corralation between Intersport Polska and MBank SA
Assuming the 90 days trading horizon Intersport Polska SA is expected to generate 1.9 times more return on investment than MBank SA. However, Intersport Polska is 1.9 times more volatile than mBank SA. It trades about -0.02 of its potential returns per unit of risk. mBank SA is currently generating about -0.06 per unit of risk. If you would invest 88.00 in Intersport Polska SA on September 1, 2024 and sell it today you would lose (15.00) from holding Intersport Polska SA or give up 17.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intersport Polska SA vs. mBank SA
Performance |
| Timeline |
| Intersport Polska |
| mBank SA |
Intersport Polska and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intersport Polska and MBank SA
The main advantage of trading using opposite Intersport Polska and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intersport Polska position performs unexpectedly, MBank SA 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 MBank SA will offset losses from the drop in MBank SA's long position.| Intersport Polska vs. Asseco Business Solutions | Intersport Polska vs. Detalion Games SA | Intersport Polska vs. Asseco South Eastern | Intersport Polska vs. CFI Holding SA |
| MBank SA vs. Ultimate Games SA | MBank SA vs. New Tech Venture | MBank SA vs. 3R Games SA | MBank SA vs. Biztech Konsulting 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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