Correlation Between Intersport Polska and MW Trade
Can any of the company-specific risk be diversified away by investing in both Intersport Polska and MW Trade 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 MW Trade 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 MW Trade SA, you can compare the effects of market volatilities on Intersport Polska and MW Trade 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 MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intersport Polska and MW Trade.
Diversification Opportunities for Intersport Polska and MW Trade
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intersport and MWT is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade 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 MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Intersport Polska i.e., Intersport Polska and MW Trade go up and down completely randomly.
Pair Corralation between Intersport Polska and MW Trade
Assuming the 90 days trading horizon Intersport Polska SA is expected to generate 1.52 times more return on investment than MW Trade. However, Intersport Polska is 1.52 times more volatile than MW Trade SA. It trades about -0.06 of its potential returns per unit of risk. MW Trade SA is currently generating about -0.13 per unit of risk. If you would invest 91.00 in Intersport Polska SA on August 25, 2024 and sell it today you would lose (29.00) from holding Intersport Polska SA or give up 31.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intersport Polska SA vs. MW Trade SA
Performance |
| Timeline |
| Intersport Polska |
| MW Trade SA |
Intersport Polska and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intersport Polska and MW Trade
The main advantage of trading using opposite Intersport Polska and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intersport Polska position performs unexpectedly, MW Trade 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 MW Trade will offset losses from the drop in MW Trade's long position.| Intersport Polska vs. Asseco Business Solutions | Intersport Polska vs. Detalion Games SA | Intersport Polska vs. Asseco South Eastern | Intersport Polska vs. Movie Games SA |
| MW Trade vs. Kruk SA | MW Trade vs. Investment Friends Capital | MW Trade vs. Asseco Business Solutions | MW Trade vs. Detalion 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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