Correlation Between Bank Millennium and Kruk SA
Can any of the company-specific risk be diversified away by investing in both Bank Millennium and Kruk SA 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 Bank Millennium and Kruk SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Millennium SA and Kruk SA, you can compare the effects of market volatilities on Bank Millennium and Kruk SA 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 Bank Millennium with a short position of Kruk SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Millennium and Kruk SA.
Diversification Opportunities for Bank Millennium and Kruk SA
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Kruk is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bank Millennium SA and Kruk SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kruk SA and Bank Millennium 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 Bank Millennium SA are associated (or correlated) with Kruk SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kruk SA has no effect on the direction of Bank Millennium i.e., Bank Millennium and Kruk SA go up and down completely randomly.
Pair Corralation between Bank Millennium and Kruk SA
Assuming the 90 days trading horizon Bank Millennium SA is expected to generate 1.15 times more return on investment than Kruk SA. However, Bank Millennium is 1.15 times more volatile than Kruk SA. It trades about 0.02 of its potential returns per unit of risk. Kruk SA is currently generating about 0.0 per unit of risk. If you would invest 835.00 in Bank Millennium SA on September 12, 2024 and sell it today you would earn a total of 39.00 from holding Bank Millennium SA or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Millennium SA vs. Kruk SA
Performance |
| Timeline |
| Bank Millennium SA |
| Kruk SA |
Bank Millennium and Kruk SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Millennium and Kruk SA
The main advantage of trading using opposite Bank Millennium and Kruk SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Millennium position performs unexpectedly, Kruk SA 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 Kruk SA will offset losses from the drop in Kruk SA's long position.| Bank Millennium vs. Noble Financials SA | Bank Millennium vs. Igoria Trade SA | Bank Millennium vs. Mercator Medical SA | Bank Millennium vs. BNP Paribas Bank |
| Kruk SA vs. Bank Millennium SA | Kruk SA vs. Centrum Finansowe Banku | Kruk SA vs. UniCredit SpA | Kruk SA vs. PZ Cormay 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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