Correlation Between PMPG Polskie and Wikana SA
Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and Wikana SA 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 Wikana SA 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 Wikana SA, you can compare the effects of market volatilities on PMPG Polskie and Wikana SA 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 Wikana SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and Wikana SA.
Diversification Opportunities for PMPG Polskie and Wikana SA
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PMPG and Wikana is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Wikana SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wikana 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 Wikana SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wikana SA has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Wikana SA go up and down completely randomly.
Pair Corralation between PMPG Polskie and Wikana SA
Assuming the 90 days trading horizon PMPG Polskie Media is expected to under-perform the Wikana SA. In addition to that, PMPG Polskie is 2.16 times more volatile than Wikana SA. It trades about -0.32 of its total potential returns per unit of risk. Wikana SA is currently generating about -0.24 per unit of volatility. If you would invest 720.00 in Wikana SA on September 12, 2024 and sell it today you would lose (80.00) from holding Wikana SA or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PMPG Polskie Media vs. Wikana SA
Performance |
| Timeline |
| PMPG Polskie Media |
| Wikana SA |
PMPG Polskie and Wikana SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMPG Polskie and Wikana SA
The main advantage of trading using opposite PMPG Polskie and Wikana SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMPG Polskie position performs unexpectedly, Wikana SA 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 Wikana SA will offset losses from the drop in Wikana SA'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 |
| Wikana SA vs. Banco Santander SA | Wikana SA vs. UniCredit SpA | Wikana SA vs. CEZ as | Wikana SA vs. Polski Koncern Naftowy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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