Correlation Between PMPG Polskie and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on PMPG Polskie and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and KGHM Polska.
Diversification Opportunities for PMPG Polskie and KGHM Polska
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PMPG and KGHM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and KGHM Polska go up and down completely randomly.
Pair Corralation between PMPG Polskie and KGHM Polska
Assuming the 90 days trading horizon PMPG Polskie Media is expected to under-perform the KGHM Polska. In addition to that, PMPG Polskie is 1.39 times more volatile than KGHM Polska Miedz. It trades about -0.01 of its total potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.01 per unit of volatility. If you would invest 12,594 in KGHM Polska Miedz on September 4, 2024 and sell it today you would earn a total of 411.00 from holding KGHM Polska Miedz or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMPG Polskie Media vs. KGHM Polska Miedz
Performance |
| Timeline |
| PMPG Polskie Media |
| KGHM Polska Miedz |
PMPG Polskie and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMPG Polskie and KGHM Polska
The main advantage of trading using opposite PMPG Polskie and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMPG Polskie position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| PMPG Polskie vs. SOFTWARE MANSION SPOLKA | PMPG Polskie vs. UF Games SA | PMPG Polskie vs. Immobile | PMPG Polskie vs. Monnari Trade SA |
| KGHM Polska vs. M Food SA | KGHM Polska vs. Skyline Investment SA | KGHM Polska vs. Quantum Software SA | KGHM Polska vs. Cloud Technologies 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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