Correlation Between Bank Polska and Reinhold Europe
Can any of the company-specific risk be diversified away by investing in both Bank Polska and Reinhold Europe 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 Reinhold Europe 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 Reinhold Europe AB, you can compare the effects of market volatilities on Bank Polska and Reinhold Europe 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 Reinhold Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and Reinhold Europe.
Diversification Opportunities for Bank Polska and Reinhold Europe
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Reinhold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and Reinhold Europe AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinhold Europe AB 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 Reinhold Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinhold Europe AB has no effect on the direction of Bank Polska i.e., Bank Polska and Reinhold Europe go up and down completely randomly.
Pair Corralation between Bank Polska and Reinhold Europe
Assuming the 90 days trading horizon Bank Polska Kasa is expected to generate 0.37 times more return on investment than Reinhold Europe. However, Bank Polska Kasa is 2.71 times less risky than Reinhold Europe. It trades about 0.07 of its potential returns per unit of risk. Reinhold Europe AB is currently generating about 0.0 per unit of risk. If you would invest 7,778 in Bank Polska Kasa on August 27, 2024 and sell it today you would earn a total of 6,157 from holding Bank Polska Kasa or generate 79.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. Reinhold Europe AB
Performance |
| Timeline |
| Bank Polska Kasa |
| Reinhold Europe AB |
Bank Polska and Reinhold Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and Reinhold Europe
The main advantage of trading using opposite Bank Polska and Reinhold Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Polska position performs unexpectedly, Reinhold Europe 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 Reinhold Europe will offset losses from the drop in Reinhold Europe's long position.| Bank Polska vs. Ultimate Games SA | Bank Polska vs. Baked Games SA | Bank Polska vs. Pixel Crow Games | Bank Polska vs. Gaming Factory SA |
| Reinhold Europe vs. Carlson Investments SA | Reinhold Europe vs. Intersport Polska SA | Reinhold Europe vs. Skyline Investment SA | Reinhold Europe vs. Echo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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