Correlation Between KGHM Polska and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and Gaming Factory 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 Gaming Factory 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 Gaming Factory SA, you can compare the effects of market volatilities on KGHM Polska and Gaming Factory 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 Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and Gaming Factory.
Diversification Opportunities for KGHM Polska and Gaming Factory
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KGHM and Gaming is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory 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 Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of KGHM Polska i.e., KGHM Polska and Gaming Factory go up and down completely randomly.
Pair Corralation between KGHM Polska and Gaming Factory
Assuming the 90 days trading horizon KGHM Polska is expected to generate 2.46 times less return on investment than Gaming Factory. But when comparing it to its historical volatility, KGHM Polska Miedz is 1.46 times less risky than Gaming Factory. It trades about 0.02 of its potential returns per unit of risk. Gaming Factory SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Gaming Factory SA on August 28, 2024 and sell it today you would earn a total of 186.00 from holding Gaming Factory SA or generate 32.63% 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. Gaming Factory SA
Performance |
| Timeline |
| KGHM Polska Miedz |
| Gaming Factory SA |
KGHM Polska and Gaming Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and Gaming Factory
The main advantage of trading using opposite KGHM Polska and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, Gaming Factory 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 Gaming Factory will offset losses from the drop in Gaming Factory's long position.| KGHM Polska vs. PZ Cormay SA | KGHM Polska vs. Globe Trade Centre | KGHM Polska vs. X Trade Brokers | KGHM Polska vs. Movie Games SA |
| Gaming Factory vs. CD PROJEKT SA | Gaming Factory vs. Movie Games SA | Gaming Factory vs. Ultimate 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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