Correlation Between LPP SA and CD PROJEKT
Can any of the company-specific risk be diversified away by investing in both LPP SA and CD PROJEKT 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 LPP SA and CD PROJEKT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPP SA and CD PROJEKT SA, you can compare the effects of market volatilities on LPP SA and CD PROJEKT 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 LPP SA with a short position of CD PROJEKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPP SA and CD PROJEKT.
Diversification Opportunities for LPP SA and CD PROJEKT
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPP and CDR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding LPP SA and CD PROJEKT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD PROJEKT SA and LPP 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 LPP SA are associated (or correlated) with CD PROJEKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD PROJEKT SA has no effect on the direction of LPP SA i.e., LPP SA and CD PROJEKT go up and down completely randomly.
Pair Corralation between LPP SA and CD PROJEKT
Assuming the 90 days trading horizon LPP SA is expected to generate 1.32 times more return on investment than CD PROJEKT. However, LPP SA is 1.32 times more volatile than CD PROJEKT SA. It trades about 0.03 of its potential returns per unit of risk. CD PROJEKT SA is currently generating about 0.03 per unit of risk. If you would invest 1,371,660 in LPP SA on September 2, 2024 and sell it today you would earn a total of 194,340 from holding LPP SA or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPP SA vs. CD PROJEKT SA
Performance |
| Timeline |
| LPP SA |
| CD PROJEKT SA |
LPP SA and CD PROJEKT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPP SA and CD PROJEKT
The main advantage of trading using opposite LPP SA and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPP SA position performs unexpectedly, CD PROJEKT 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 CD PROJEKT will offset losses from the drop in CD PROJEKT's long position.| LPP SA vs. True Games Syndicate | LPP SA vs. PLAYWAY SA | LPP SA vs. TEN SQUARE GAMES | LPP SA vs. GreenX Metals |
| CD PROJEKT vs. LPP SA | CD PROJEKT vs. Stalprodukt SA | CD PROJEKT vs. mBank SA | CD PROJEKT vs. Santander Bank Polska |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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