Correlation Between Bank Polska and KCI SA
Can any of the company-specific risk be diversified away by investing in both Bank Polska and KCI 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 Polska and KCI SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Polska Kasa and KCI SA, you can compare the effects of market volatilities on Bank Polska and KCI 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 Polska with a short position of KCI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and KCI SA.
Diversification Opportunities for Bank Polska and KCI SA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and KCI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and KCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCI SA and Bank Polska 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 Polska Kasa are associated (or correlated) with KCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCI SA has no effect on the direction of Bank Polska i.e., Bank Polska and KCI SA go up and down completely randomly.
Pair Corralation between Bank Polska and KCI SA
Assuming the 90 days trading horizon Bank Polska Kasa is expected to under-perform the KCI SA. In addition to that, Bank Polska is 1.22 times more volatile than KCI SA. It trades about -0.06 of its total potential returns per unit of risk. KCI SA is currently generating about -0.02 per unit of volatility. If you would invest 84.00 in KCI SA on September 1, 2024 and sell it today you would lose (4.00) from holding KCI SA or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. KCI SA
Performance |
| Timeline |
| Bank Polska Kasa |
| KCI SA |
Bank Polska and KCI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and KCI SA
The main advantage of trading using opposite Bank Polska and KCI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Polska position performs unexpectedly, KCI 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 KCI SA will offset losses from the drop in KCI SA's long position.| Bank Polska vs. New Tech Venture | Bank Polska vs. Skyline Investment SA | Bank Polska vs. Creotech Instruments SA | Bank Polska vs. Carlson Investments SA |
| KCI SA vs. Asseco Business Solutions | KCI SA vs. Detalion Games SA | KCI SA vs. Asseco South Eastern | KCI SA vs. CFI Holding 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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