Correlation Between Medicofarma Biotech and Bank Polska
Can any of the company-specific risk be diversified away by investing in both Medicofarma Biotech and Bank 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 Medicofarma Biotech and Bank Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicofarma Biotech SA and Bank Polska Kasa, you can compare the effects of market volatilities on Medicofarma Biotech and Bank 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 Medicofarma Biotech with a short position of Bank Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicofarma Biotech and Bank Polska.
Diversification Opportunities for Medicofarma Biotech and Bank Polska
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Medicofarma and Bank is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Medicofarma Biotech SA and Bank Polska Kasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Polska Kasa and Medicofarma Biotech 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 Medicofarma Biotech SA are associated (or correlated) with Bank Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Polska Kasa has no effect on the direction of Medicofarma Biotech i.e., Medicofarma Biotech and Bank Polska go up and down completely randomly.
Pair Corralation between Medicofarma Biotech and Bank Polska
Assuming the 90 days trading horizon Medicofarma Biotech is expected to generate 2.64 times less return on investment than Bank Polska. In addition to that, Medicofarma Biotech is 2.41 times more volatile than Bank Polska Kasa. It trades about 0.06 of its total potential returns per unit of risk. Bank Polska Kasa is currently generating about 0.4 per unit of volatility. If you would invest 13,875 in Bank Polska Kasa on October 25, 2024 and sell it today you would earn a total of 1,430 from holding Bank Polska Kasa or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medicofarma Biotech SA vs. Bank Polska Kasa
Performance |
| Timeline |
| Medicofarma Biotech |
| Bank Polska Kasa |
Medicofarma Biotech and Bank Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicofarma Biotech and Bank Polska
The main advantage of trading using opposite Medicofarma Biotech and Bank Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicofarma Biotech position performs unexpectedly, Bank 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 Bank Polska will offset losses from the drop in Bank Polska's long position.| Medicofarma Biotech vs. Investment Friends Capital | Medicofarma Biotech vs. SOFTWARE MANSION SPOLKA | Medicofarma Biotech vs. Saule Technologies SA | Medicofarma Biotech vs. PZ Cormay SA |
| Bank Polska vs. PZ Cormay SA | Bank Polska vs. Cloud Technologies SA | Bank Polska vs. Medicofarma Biotech SA | Bank Polska vs. Examobile 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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