Correlation Between Polski Koncern and CD PROJEKT
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and CD PROJEKT 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 CD PROJEKT 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 CD PROJEKT SA, you can compare the effects of market volatilities on Polski Koncern and CD PROJEKT 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 CD PROJEKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and CD PROJEKT.
Diversification Opportunities for Polski Koncern and CD PROJEKT
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polski and CDR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and CD PROJEKT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD PROJEKT 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 CD PROJEKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD PROJEKT SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and CD PROJEKT go up and down completely randomly.
Pair Corralation between Polski Koncern and CD PROJEKT
Assuming the 90 days trading horizon Polski Koncern is expected to generate 12.2 times less return on investment than CD PROJEKT. But when comparing it to its historical volatility, Polski Koncern Naftowy is 1.42 times less risky than CD PROJEKT. It trades about 0.01 of its potential returns per unit of risk. CD PROJEKT SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14,361 in CD PROJEKT SA on October 24, 2024 and sell it today you would earn a total of 6,819 from holding CD PROJEKT SA or generate 47.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. CD PROJEKT SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| CD PROJEKT SA |
Polski Koncern and CD PROJEKT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and CD PROJEKT
The main advantage of trading using opposite Polski Koncern and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, CD PROJEKT 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 CD PROJEKT will offset losses from the drop in CD PROJEKT's long position.| Polski Koncern vs. Carlson Investments SA | Polski Koncern vs. Echo Investment SA | Polski Koncern vs. Vivid Games SA | Polski Koncern vs. Medicalg |
| CD PROJEKT vs. Igoria Trade SA | CD PROJEKT vs. Investment Friends Capital | CD PROJEKT vs. Monnari Trade SA | CD PROJEKT vs. Medicalg |
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.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |