Correlation Between KGHM Polska and Atal SA
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and Atal 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 KGHM Polska and Atal SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KGHM Polska Miedz and Atal SA, you can compare the effects of market volatilities on KGHM Polska and Atal 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 KGHM Polska with a short position of Atal SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and Atal SA.
Diversification Opportunities for KGHM Polska and Atal SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KGHM and Atal is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Atal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atal SA and KGHM 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 KGHM Polska Miedz are associated (or correlated) with Atal SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atal SA has no effect on the direction of KGHM Polska i.e., KGHM Polska and Atal SA go up and down completely randomly.
Pair Corralation between KGHM Polska and Atal SA
Assuming the 90 days trading horizon KGHM Polska Miedz is expected to under-perform the Atal SA. In addition to that, KGHM Polska is 1.72 times more volatile than Atal SA. It trades about -0.18 of its total potential returns per unit of risk. Atal SA is currently generating about 0.04 per unit of volatility. If you would invest 5,120 in Atal SA on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Atal SA or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
KGHM Polska Miedz vs. Atal SA
Performance |
| Timeline |
| KGHM Polska Miedz |
| Atal SA |
KGHM Polska and Atal SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and Atal SA
The main advantage of trading using opposite KGHM Polska and Atal SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, Atal 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 Atal SA will offset losses from the drop in Atal SA's long position.| KGHM Polska vs. Gamedust SA | KGHM Polska vs. Intersport Polska SA | KGHM Polska vs. Inter Cars SA | KGHM Polska vs. Centrum Finansowe Banku |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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