Correlation Between Bank Polska and SUNEX SA
Can any of the company-specific risk be diversified away by investing in both Bank Polska and SUNEX 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 SUNEX 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 SUNEX SA, you can compare the effects of market volatilities on Bank Polska and SUNEX 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 SUNEX SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and SUNEX SA.
Diversification Opportunities for Bank Polska and SUNEX SA
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and SUNEX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and SUNEX SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNEX 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 SUNEX SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNEX SA has no effect on the direction of Bank Polska i.e., Bank Polska and SUNEX SA go up and down completely randomly.
Pair Corralation between Bank Polska and SUNEX SA
Assuming the 90 days trading horizon Bank Polska Kasa is expected to generate 0.68 times more return on investment than SUNEX SA. However, Bank Polska Kasa is 1.48 times less risky than SUNEX SA. It trades about -0.06 of its potential returns per unit of risk. SUNEX SA is currently generating about -0.07 per unit of risk. If you would invest 17,076 in Bank Polska Kasa on September 3, 2024 and sell it today you would lose (3,511) from holding Bank Polska Kasa or give up 20.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. SUNEX SA
Performance |
| Timeline |
| Bank Polska Kasa |
| SUNEX SA |
Bank Polska and SUNEX SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and SUNEX SA
The main advantage of trading using opposite Bank Polska and SUNEX SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Polska position performs unexpectedly, SUNEX 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 SUNEX SA will offset losses from the drop in SUNEX SA's long position.| Bank Polska vs. UniCredit SpA | Bank Polska vs. Santander Bank Polska | Bank Polska vs. Bank Handlowy w | Bank Polska vs. BNP Paribas Bank |
| SUNEX SA vs. Pyramid Games SA | SUNEX SA vs. Gamedust SA | SUNEX SA vs. Quantum Software SA | SUNEX SA vs. True Games Syndicate |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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