Correlation Between MBank SA and Jastrzebska Spotka
Can any of the company-specific risk be diversified away by investing in both MBank SA and Jastrzebska Spotka 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 MBank SA and Jastrzebska Spotka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mBank SA and Jastrzebska Spotka Weglowa, you can compare the effects of market volatilities on MBank SA and Jastrzebska Spotka 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 MBank SA with a short position of Jastrzebska Spotka. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and Jastrzebska Spotka.
Diversification Opportunities for MBank SA and Jastrzebska Spotka
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MBank and Jastrzebska is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Jastrzebska Spotka Weglowa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jastrzebska Spotka and MBank 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 mBank SA are associated (or correlated) with Jastrzebska Spotka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jastrzebska Spotka has no effect on the direction of MBank SA i.e., MBank SA and Jastrzebska Spotka go up and down completely randomly.
Pair Corralation between MBank SA and Jastrzebska Spotka
Assuming the 90 days trading horizon mBank SA is expected to generate 0.81 times more return on investment than Jastrzebska Spotka. However, mBank SA is 1.24 times less risky than Jastrzebska Spotka. It trades about 0.06 of its potential returns per unit of risk. Jastrzebska Spotka Weglowa is currently generating about -0.05 per unit of risk. If you would invest 34,500 in mBank SA on August 28, 2024 and sell it today you would earn a total of 20,440 from holding mBank SA or generate 59.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
mBank SA vs. Jastrzebska Spotka Weglowa
Performance |
| Timeline |
| mBank SA |
| Jastrzebska Spotka |
MBank SA and Jastrzebska Spotka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and Jastrzebska Spotka
The main advantage of trading using opposite MBank SA and Jastrzebska Spotka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, Jastrzebska Spotka 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 Jastrzebska Spotka will offset losses from the drop in Jastrzebska Spotka's long position.The idea behind mBank SA and Jastrzebska Spotka Weglowa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jastrzebska Spotka vs. SOFTWARE MANSION SPOLKA | Jastrzebska Spotka vs. PZ Cormay SA | Jastrzebska Spotka vs. Pixel Crow Games | Jastrzebska Spotka vs. GreenX Metals |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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