Correlation Between Bank Polska and MW Trade
Can any of the company-specific risk be diversified away by investing in both Bank Polska and MW Trade 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 MW Trade 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 MW Trade SA, you can compare the effects of market volatilities on Bank Polska and MW Trade 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 MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and MW Trade.
Diversification Opportunities for Bank Polska and MW Trade
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and MWT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade 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 MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Bank Polska i.e., Bank Polska and MW Trade go up and down completely randomly.
Pair Corralation between Bank Polska and MW Trade
Assuming the 90 days trading horizon Bank Polska Kasa is expected to under-perform the MW Trade. In addition to that, Bank Polska is 1.74 times more volatile than MW Trade SA. It trades about -0.12 of its total potential returns per unit of risk. MW Trade SA is currently generating about 0.0 per unit of volatility. If you would invest 322.00 in MW Trade SA on January 13, 2025 and sell it today you would lose (2.00) from holding MW Trade SA or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. MW Trade SA
Performance |
| Timeline |
| Bank Polska Kasa |
| MW Trade SA |
Bank Polska and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and MW Trade
The main advantage of trading using opposite Bank Polska and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Polska position performs unexpectedly, MW Trade 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 MW Trade will offset losses from the drop in MW Trade's long position.| Bank Polska vs. UniCredit SpA | Bank Polska vs. Santander Bank Polska | Bank Polska vs. ING Bank lski | Bank Polska vs. mBank SA |
| MW Trade vs. TEN SQUARE GAMES | MW Trade vs. Biztech Konsulting SA | MW Trade vs. Baked Games SA | MW Trade vs. Skyline Investment 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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