Correlation Between Kruk SA and MW Trade
Can any of the company-specific risk be diversified away by investing in both Kruk SA and MW Trade 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 Kruk SA and MW Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kruk SA and MW Trade SA, you can compare the effects of market volatilities on Kruk SA and MW Trade 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 Kruk SA with a short position of MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kruk SA and MW Trade.
Diversification Opportunities for Kruk SA and MW Trade
Modest diversification
The 3 months correlation between Kruk and MWT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kruk SA and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade SA and Kruk SA 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 Kruk SA are associated (or correlated) with MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Kruk SA i.e., Kruk SA and MW Trade go up and down completely randomly.
Pair Corralation between Kruk SA and MW Trade
Assuming the 90 days trading horizon Kruk SA is expected to generate 0.5 times more return on investment than MW Trade. However, Kruk SA is 2.01 times less risky than MW Trade. It trades about -0.06 of its potential returns per unit of risk. MW Trade SA is currently generating about -0.2 per unit of risk. If you would invest 44,500 in Kruk SA on August 29, 2024 and sell it today you would lose (2,500) from holding Kruk SA or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Kruk SA vs. MW Trade SA
Performance |
| Timeline |
| Kruk SA |
| MW Trade SA |
Kruk SA and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kruk SA and MW Trade
The main advantage of trading using opposite Kruk SA and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kruk SA position performs unexpectedly, MW Trade 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 MW Trade will offset losses from the drop in MW Trade's long position.| Kruk SA vs. PMPG Polskie Media | Kruk SA vs. Movie Games SA | Kruk SA vs. Road Studio SA | Kruk SA vs. True Games Syndicate |
| MW Trade vs. Investment Friends Capital | MW Trade vs. Asseco Business Solutions | MW Trade vs. Detalion Games SA | MW Trade vs. CFI Holding 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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