Correlation Between Bank Polska and Medicalg
Can any of the company-specific risk be diversified away by investing in both Bank Polska and Medicalg 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 Medicalg 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 Medicalg, you can compare the effects of market volatilities on Bank Polska and Medicalg 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 Medicalg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and Medicalg.
Diversification Opportunities for Bank Polska and Medicalg
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Medicalg is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and Medicalg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicalg 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 Medicalg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicalg has no effect on the direction of Bank Polska i.e., Bank Polska and Medicalg go up and down completely randomly.
Pair Corralation between Bank Polska and Medicalg
Assuming the 90 days trading horizon Bank Polska Kasa is expected to generate 0.58 times more return on investment than Medicalg. However, Bank Polska Kasa is 1.73 times less risky than Medicalg. It trades about -0.11 of its potential returns per unit of risk. Medicalg is currently generating about -0.26 per unit of risk. If you would invest 14,820 in Bank Polska Kasa on August 30, 2024 and sell it today you would lose (915.00) from holding Bank Polska Kasa or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. Medicalg
Performance |
| Timeline |
| Bank Polska Kasa |
| Medicalg |
Bank Polska and Medicalg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and Medicalg
The main advantage of trading using opposite Bank Polska and Medicalg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Polska position performs unexpectedly, Medicalg 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 Medicalg will offset losses from the drop in Medicalg's long position.| Bank Polska vs. M Food SA | Bank Polska vs. Cloud Technologies SA | Bank Polska vs. Biztech Konsulting SA | Bank Polska vs. Quantum Software SA |
| Medicalg vs. Adiuvo Investment SA | Medicalg vs. Asseco Business Solutions | Medicalg vs. Detalion Games SA | Medicalg 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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