Correlation Between KGHM Polska and Marie Brizard
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and Marie Brizard 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 Marie Brizard 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 Marie Brizard Wine, you can compare the effects of market volatilities on KGHM Polska and Marie Brizard 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 Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and Marie Brizard.
Diversification Opportunities for KGHM Polska and Marie Brizard
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KGHM and Marie is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine 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 Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of KGHM Polska i.e., KGHM Polska and Marie Brizard go up and down completely randomly.
Pair Corralation between KGHM Polska and Marie Brizard
Assuming the 90 days trading horizon KGHM Polska Miedz is expected to under-perform the Marie Brizard. But the stock apears to be less risky and, when comparing its historical volatility, KGHM Polska Miedz is 1.29 times less risky than Marie Brizard. The stock trades about -0.31 of its potential returns per unit of risk. The Marie Brizard Wine is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,465 in Marie Brizard Wine on August 26, 2024 and sell it today you would earn a total of 185.00 from holding Marie Brizard Wine or generate 12.63% 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. Marie Brizard Wine
Performance |
| Timeline |
| KGHM Polska Miedz |
| Marie Brizard Wine |
KGHM Polska and Marie Brizard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and Marie Brizard
The main advantage of trading using opposite KGHM Polska and Marie Brizard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, Marie Brizard 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 Marie Brizard will offset losses from the drop in Marie Brizard's long position.| KGHM Polska vs. Marie Brizard Wine | KGHM Polska vs. Quantum Software SA | KGHM Polska vs. SOFTWARE MANSION SPOLKA | KGHM Polska vs. Mlk Foods Public |
| Marie Brizard vs. Saule Technologies SA | Marie Brizard vs. Bank Millennium SA | Marie Brizard vs. SOFTWARE MANSION SPOLKA | Marie Brizard vs. UniCredit SpA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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