Correlation Between PMPG Polskie and Pepco Group
Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and Pepco Group 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 Pepco Group 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 Pepco Group BV, you can compare the effects of market volatilities on PMPG Polskie and Pepco Group 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 Pepco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and Pepco Group.
Diversification Opportunities for PMPG Polskie and Pepco Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PMPG and Pepco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Pepco Group BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pepco Group BV 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 Pepco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pepco Group BV has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Pepco Group go up and down completely randomly.
Pair Corralation between PMPG Polskie and Pepco Group
Assuming the 90 days trading horizon PMPG Polskie Media is expected to under-perform the Pepco Group. In addition to that, PMPG Polskie is 2.28 times more volatile than Pepco Group BV. It trades about -0.27 of its total potential returns per unit of risk. Pepco Group BV is currently generating about -0.17 per unit of volatility. If you would invest 1,748 in Pepco Group BV on August 29, 2024 and sell it today you would lose (134.00) from holding Pepco Group BV or give up 7.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMPG Polskie Media vs. Pepco Group BV
Performance |
| Timeline |
| PMPG Polskie Media |
| Pepco Group BV |
PMPG Polskie and Pepco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMPG Polskie and Pepco Group
The main advantage of trading using opposite PMPG Polskie and Pepco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMPG Polskie position performs unexpectedly, Pepco Group 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 Pepco Group will offset losses from the drop in Pepco Group's long position.| PMPG Polskie vs. Monnari Trade SA | PMPG Polskie vs. MW Trade SA | PMPG Polskie vs. Pixel Crow Games | PMPG Polskie vs. Mlk Foods Public |
| Pepco Group vs. Carlson Investments SA | Pepco Group vs. Tower Investments SA | Pepco Group vs. Mercator Medical SA | Pepco Group vs. Bank Millennium 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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