Correlation Between Live Motion and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Live Motion and KGHM Polska 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 Live Motion and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Motion Games and KGHM Polska Miedz, you can compare the effects of market volatilities on Live Motion and KGHM Polska 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 Live Motion with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Motion and KGHM Polska.
Diversification Opportunities for Live Motion and KGHM Polska
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Live and KGHM is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Live Motion Games and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz and Live Motion 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 Live Motion Games are associated (or correlated) with KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Live Motion i.e., Live Motion and KGHM Polska go up and down completely randomly.
Pair Corralation between Live Motion and KGHM Polska
Assuming the 90 days trading horizon Live Motion Games is expected to generate 7.78 times more return on investment than KGHM Polska. However, Live Motion is 7.78 times more volatile than KGHM Polska Miedz. It trades about 0.14 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.24 per unit of risk. If you would invest 89.00 in Live Motion Games on October 25, 2024 and sell it today you would earn a total of 15.00 from holding Live Motion Games or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Motion Games vs. KGHM Polska Miedz
Performance |
| Timeline |
| Live Motion Games |
| KGHM Polska Miedz |
Live Motion and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Motion and KGHM Polska
The main advantage of trading using opposite Live Motion and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Motion position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Live Motion vs. SOFTWARE MANSION SPOLKA | Live Motion vs. Pyramid Games SA | Live Motion vs. LSI Software SA | Live Motion vs. Quantum Software SA |
| KGHM Polska vs. LSI Software SA | KGHM Polska vs. MW Trade SA | KGHM Polska vs. Skyline Investment SA | KGHM Polska vs. Igoria Trade 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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