Correlation Between Bank Polska and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both Bank Polska and Polski Koncern 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 Polski Koncern 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 Polski Koncern Naftowy, you can compare the effects of market volatilities on Bank Polska and Polski Koncern 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 Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and Polski Koncern.
Diversification Opportunities for Bank Polska and Polski Koncern
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Polski is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy 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 Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of Bank Polska i.e., Bank Polska and Polski Koncern go up and down completely randomly.
Pair Corralation between Bank Polska and Polski Koncern
Assuming the 90 days trading horizon Bank Polska Kasa is expected to generate 0.85 times more return on investment than Polski Koncern. However, Bank Polska Kasa is 1.17 times less risky than Polski Koncern. It trades about 0.21 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about 0.08 per unit of risk. If you would invest 14,330 in Bank Polska Kasa on November 3, 2024 and sell it today you would earn a total of 1,705 from holding Bank Polska Kasa or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. Polski Koncern Naftowy
Performance |
| Timeline |
| Bank Polska Kasa |
| Polski Koncern Naftowy |
Bank Polska and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and Polski Koncern
The main advantage of trading using opposite Bank Polska and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Polska position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern's long position.| Bank Polska vs. Noble Financials SA | Bank Polska vs. Pyramid Games SA | Bank Polska vs. Vivid Games SA | Bank Polska vs. Creativeforge Games SA |
| Polski Koncern vs. TEN SQUARE GAMES | Polski Koncern vs. Bank Millennium SA | Polski Koncern vs. Vivid Games SA | Polski Koncern vs. BNP Paribas Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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