Correlation Between PMPG Polskie and Vigo System
Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and Vigo System 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 Vigo System 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 Vigo System SA, you can compare the effects of market volatilities on PMPG Polskie and Vigo System 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 Vigo System. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and Vigo System.
Diversification Opportunities for PMPG Polskie and Vigo System
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PMPG and Vigo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Vigo System SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vigo System 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 Vigo System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vigo System SA has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Vigo System go up and down completely randomly.
Pair Corralation between PMPG Polskie and Vigo System
Assuming the 90 days trading horizon PMPG Polskie Media is expected to under-perform the Vigo System. In addition to that, PMPG Polskie is 2.91 times more volatile than Vigo System SA. It trades about -0.31 of its total potential returns per unit of risk. Vigo System SA is currently generating about -0.14 per unit of volatility. If you would invest 44,600 in Vigo System SA on September 13, 2024 and sell it today you would lose (2,200) from holding Vigo System SA or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PMPG Polskie Media vs. Vigo System SA
Performance |
| Timeline |
| PMPG Polskie Media |
| Vigo System SA |
PMPG Polskie and Vigo System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMPG Polskie and Vigo System
The main advantage of trading using opposite PMPG Polskie and Vigo System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMPG Polskie position performs unexpectedly, Vigo System 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 Vigo System will offset losses from the drop in Vigo System's long position.| PMPG Polskie vs. UniCredit SpA | PMPG Polskie vs. Ultimate Games SA | PMPG Polskie vs. Alior Bank SA | PMPG Polskie vs. Bank Millennium SA |
| Vigo System vs. SOFTWARE MANSION SPOLKA | Vigo System vs. Intersport Polska SA | Vigo System vs. Ultimate Games SA | Vigo System vs. Live Motion Games |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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