Correlation Between KGHM Polska and MOLSON RS
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and MOLSON RS 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 MOLSON RS 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 MOLSON RS BEVERAGE, you can compare the effects of market volatilities on KGHM Polska and MOLSON RS 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 MOLSON RS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and MOLSON RS.
Diversification Opportunities for KGHM Polska and MOLSON RS
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KGHM and MOLSON is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON RS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of KGHM Polska i.e., KGHM Polska and MOLSON RS go up and down completely randomly.
Pair Corralation between KGHM Polska and MOLSON RS
Assuming the 90 days trading horizon KGHM Polska Miedz is expected to generate 0.94 times more return on investment than MOLSON RS. However, KGHM Polska Miedz is 1.07 times less risky than MOLSON RS. It trades about 0.03 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.0 per unit of risk. If you would invest 2,358 in KGHM Polska Miedz on September 15, 2024 and sell it today you would earn a total of 671.00 from holding KGHM Polska Miedz or generate 28.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KGHM Polska Miedz vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| KGHM Polska Miedz |
| MOLSON RS BEVERAGE |
KGHM Polska and MOLSON RS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and MOLSON RS
The main advantage of trading using opposite KGHM Polska and MOLSON RS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, MOLSON RS 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 MOLSON RS will offset losses from the drop in MOLSON RS's long position.| KGHM Polska vs. EBRO FOODS | KGHM Polska vs. Collins Foods Limited | KGHM Polska vs. EAT WELL INVESTMENT | KGHM Polska vs. National Beverage Corp |
| MOLSON RS vs. Superior Plus Corp | MOLSON RS vs. SIVERS SEMICONDUCTORS AB | MOLSON RS vs. NorAm Drilling AS | MOLSON RS vs. Norsk Hydro ASA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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