Correlation Between Polski Koncern and ADX
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and ADX 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 ADX 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 ADX, you can compare the effects of market volatilities on Polski Koncern and ADX 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 ADX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and ADX.
Diversification Opportunities for Polski Koncern and ADX
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polski and ADX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and ADX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADX 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 ADX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADX has no effect on the direction of Polski Koncern i.e., Polski Koncern and ADX go up and down completely randomly.
Pair Corralation between Polski Koncern and ADX
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the ADX. But the stock apears to be less risky and, when comparing its historical volatility, Polski Koncern Naftowy is 1.8 times less risky than ADX. The stock trades about -0.07 of its potential returns per unit of risk. The ADX is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 26.00 in ADX on August 28, 2024 and sell it today you would earn a total of 1.00 from holding ADX or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. ADX
Performance |
| Timeline |
| Polski Koncern Naftowy |
| ADX |
Polski Koncern and ADX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and ADX
The main advantage of trading using opposite Polski Koncern and ADX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, ADX 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 ADX will offset losses from the drop in ADX's long position.| Polski Koncern vs. Asseco Business Solutions | Polski Koncern vs. Detalion Games SA | Polski Koncern vs. Asseco South Eastern | Polski Koncern 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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