Correlation Between KGHM Polska and Agroton Public
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and Agroton Public 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 Agroton Public 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 Agroton Public, you can compare the effects of market volatilities on KGHM Polska and Agroton Public 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 Agroton Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and Agroton Public.
Diversification Opportunities for KGHM Polska and Agroton Public
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KGHM and Agroton is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Agroton Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agroton Public 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 Agroton Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agroton Public has no effect on the direction of KGHM Polska i.e., KGHM Polska and Agroton Public go up and down completely randomly.
Pair Corralation between KGHM Polska and Agroton Public
Assuming the 90 days trading horizon KGHM Polska is expected to generate 1.47 times less return on investment than Agroton Public. But when comparing it to its historical volatility, KGHM Polska Miedz is 1.3 times less risky than Agroton Public. It trades about 0.04 of its potential returns per unit of risk. Agroton Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Agroton Public on September 12, 2024 and sell it today you would earn a total of 92.00 from holding Agroton Public or generate 32.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KGHM Polska Miedz vs. Agroton Public
Performance |
| Timeline |
| KGHM Polska Miedz |
| Agroton Public |
KGHM Polska and Agroton Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and Agroton Public
The main advantage of trading using opposite KGHM Polska and Agroton Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, Agroton Public 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 Agroton Public will offset losses from the drop in Agroton Public's long position.| KGHM Polska vs. Asseco Business Solutions | KGHM Polska vs. Detalion Games SA | KGHM Polska vs. Asseco South Eastern | KGHM Polska vs. HM Inwest SA |
| Agroton Public vs. Astarta Holding NV | Agroton Public vs. Asseco Business Solutions | Agroton Public vs. Detalion Games SA | Agroton Public vs. Kogeneracja 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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