Correlation Between KGHM Polska and Oponeopl
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and Oponeopl 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 Oponeopl 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 Oponeopl SA, you can compare the effects of market volatilities on KGHM Polska and Oponeopl 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 Oponeopl. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and Oponeopl.
Diversification Opportunities for KGHM Polska and Oponeopl
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KGHM and Oponeopl is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Oponeopl SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oponeopl 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 Oponeopl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oponeopl SA has no effect on the direction of KGHM Polska i.e., KGHM Polska and Oponeopl go up and down completely randomly.
Pair Corralation between KGHM Polska and Oponeopl
Assuming the 90 days trading horizon KGHM Polska is expected to generate 5.12 times less return on investment than Oponeopl. In addition to that, KGHM Polska is 1.06 times more volatile than Oponeopl SA. It trades about 0.02 of its total potential returns per unit of risk. Oponeopl SA is currently generating about 0.09 per unit of volatility. If you would invest 3,297 in Oponeopl SA on August 30, 2024 and sell it today you would earn a total of 4,683 from holding Oponeopl SA or generate 142.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KGHM Polska Miedz vs. Oponeopl SA
Performance |
| Timeline |
| KGHM Polska Miedz |
| Oponeopl SA |
KGHM Polska and Oponeopl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and Oponeopl
The main advantage of trading using opposite KGHM Polska and Oponeopl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, Oponeopl 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 Oponeopl will offset losses from the drop in Oponeopl's long position.| KGHM Polska vs. Asseco Business Solutions | KGHM Polska vs. Detalion Games SA | KGHM Polska vs. CFI Holding SA | KGHM Polska vs. HM Inwest SA |
| Oponeopl vs. Banco Santander SA | Oponeopl vs. UniCredit SpA | Oponeopl vs. CEZ as | Oponeopl vs. Polski Koncern Naftowy |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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