Correlation Between PMPG Polskie and Alior Bank
Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and Alior Bank 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 PMPG Polskie and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PMPG Polskie Media and Alior Bank SA, you can compare the effects of market volatilities on PMPG Polskie and Alior Bank 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 PMPG Polskie with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and Alior Bank.
Diversification Opportunities for PMPG Polskie and Alior Bank
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PMPG and Alior is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and PMPG Polskie 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 PMPG Polskie Media are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Alior Bank go up and down completely randomly.
Pair Corralation between PMPG Polskie and Alior Bank
Assuming the 90 days trading horizon PMPG Polskie Media is expected to under-perform the Alior Bank. In addition to that, PMPG Polskie is 2.33 times more volatile than Alior Bank SA. It trades about -0.32 of its total potential returns per unit of risk. Alior Bank SA is currently generating about -0.14 per unit of volatility. If you would invest 9,460 in Alior Bank SA on September 12, 2024 and sell it today you would lose (560.00) from holding Alior Bank SA or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMPG Polskie Media vs. Alior Bank SA
Performance |
| Timeline |
| PMPG Polskie Media |
| Alior Bank SA |
PMPG Polskie and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMPG Polskie and Alior Bank
The main advantage of trading using opposite PMPG Polskie and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMPG Polskie position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| PMPG Polskie vs. PZ Cormay SA | PMPG Polskie vs. Echo Investment SA | PMPG Polskie vs. Quantum Software SA | PMPG Polskie vs. Gaming Factory SA |
| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Detalion Games SA | Alior Bank vs. Asseco South Eastern |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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