Correlation Between Polski Koncern and 4Mass SA
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and 4Mass 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 Polski Koncern and 4Mass SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polski Koncern Naftowy and 4Mass SA, you can compare the effects of market volatilities on Polski Koncern and 4Mass 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 Polski Koncern with a short position of 4Mass SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and 4Mass SA.
Diversification Opportunities for Polski Koncern and 4Mass SA
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Polski and 4Mass is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and 4Mass SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Mass SA and Polski Koncern 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 Polski Koncern Naftowy are associated (or correlated) with 4Mass SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Mass SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and 4Mass SA go up and down completely randomly.
Pair Corralation between Polski Koncern and 4Mass SA
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the 4Mass SA. But the stock apears to be less risky and, when comparing its historical volatility, Polski Koncern Naftowy is 1.47 times less risky than 4Mass SA. The stock trades about -0.03 of its potential returns per unit of risk. The 4Mass SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 590.00 in 4Mass SA on September 4, 2024 and sell it today you would earn a total of 37.00 from holding 4Mass SA or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. 4Mass SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| 4Mass SA |
Polski Koncern and 4Mass SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and 4Mass SA
The main advantage of trading using opposite Polski Koncern and 4Mass SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, 4Mass 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 4Mass SA will offset losses from the drop in 4Mass SA's long position.| Polski Koncern vs. Asseco South Eastern | Polski Koncern vs. Vercom SA | Polski Koncern vs. CFI Holding SA | Polski Koncern vs. Gobarto SA |
| 4Mass SA vs. Asseco Business Solutions | 4Mass SA vs. Kogeneracja SA | 4Mass SA vs. Asseco South Eastern | 4Mass SA vs. Movie Games 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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