Correlation Between Grupa KTY and Dom Development
Can any of the company-specific risk be diversified away by investing in both Grupa KTY and Dom Development 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 Grupa KTY and Dom Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupa KTY SA and Dom Development SA, you can compare the effects of market volatilities on Grupa KTY and Dom Development 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 Grupa KTY with a short position of Dom Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupa KTY and Dom Development.
Diversification Opportunities for Grupa KTY and Dom Development
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupa and Dom is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Grupa KTY SA and Dom Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dom Development SA and Grupa KTY 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 Grupa KTY SA are associated (or correlated) with Dom Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dom Development SA has no effect on the direction of Grupa KTY i.e., Grupa KTY and Dom Development go up and down completely randomly.
Pair Corralation between Grupa KTY and Dom Development
Assuming the 90 days trading horizon Grupa KTY SA is expected to generate 0.54 times more return on investment than Dom Development. However, Grupa KTY SA is 1.84 times less risky than Dom Development. It trades about 0.09 of its potential returns per unit of risk. Dom Development SA is currently generating about -0.01 per unit of risk. If you would invest 69,700 in Grupa KTY SA on September 13, 2024 and sell it today you would earn a total of 1,700 from holding Grupa KTY SA or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupa KTY SA vs. Dom Development SA
Performance |
| Timeline |
| Grupa KTY SA |
| Dom Development SA |
Grupa KTY and Dom Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupa KTY and Dom Development
The main advantage of trading using opposite Grupa KTY and Dom Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupa KTY position performs unexpectedly, Dom Development 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 Dom Development will offset losses from the drop in Dom Development's long position.| Grupa KTY vs. Noble Financials SA | Grupa KTY vs. Quantum Software SA | Grupa KTY vs. Medicofarma Biotech SA | Grupa KTY vs. Creotech Instruments SA |
| Dom Development vs. Saule Technologies SA | Dom Development vs. PZ Cormay SA | Dom Development vs. PLAYWAY SA | Dom Development vs. Carlson Investments 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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