Correlation Between PMPG Polskie and Biztech Konsulting
Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and Biztech Konsulting 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 Biztech Konsulting 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 Biztech Konsulting SA, you can compare the effects of market volatilities on PMPG Polskie and Biztech Konsulting 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 Biztech Konsulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and Biztech Konsulting.
Diversification Opportunities for PMPG Polskie and Biztech Konsulting
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PMPG and Biztech is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Biztech Konsulting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biztech Konsulting 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 Biztech Konsulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biztech Konsulting has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Biztech Konsulting go up and down completely randomly.
Pair Corralation between PMPG Polskie and Biztech Konsulting
Assuming the 90 days trading horizon PMPG Polskie Media is expected to under-perform the Biztech Konsulting. But the stock apears to be less risky and, when comparing its historical volatility, PMPG Polskie Media is 1.48 times less risky than Biztech Konsulting. The stock trades about -0.06 of its potential returns per unit of risk. The Biztech Konsulting SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Biztech Konsulting SA on September 12, 2024 and sell it today you would lose (12.00) from holding Biztech Konsulting SA or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
PMPG Polskie Media vs. Biztech Konsulting SA
Performance |
| Timeline |
| PMPG Polskie Media |
| Biztech Konsulting |
PMPG Polskie and Biztech Konsulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMPG Polskie and Biztech Konsulting
The main advantage of trading using opposite PMPG Polskie and Biztech Konsulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMPG Polskie position performs unexpectedly, Biztech Konsulting 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 Biztech Konsulting will offset losses from the drop in Biztech Konsulting'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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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