Correlation Between Polski Koncern and Dom Development
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Dom Development 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 Dom Development 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 Dom Development SA, you can compare the effects of market volatilities on Polski Koncern and Dom Development 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 Dom Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Dom Development.
Diversification Opportunities for Polski Koncern and Dom Development
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polski and Dom is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Dom Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dom Development 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 Dom Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dom Development SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Dom Development go up and down completely randomly.
Pair Corralation between Polski Koncern and Dom Development
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the Dom Development. But the stock apears to be less risky and, when comparing its historical volatility, Polski Koncern Naftowy is 1.23 times less risky than Dom Development. The stock trades about -0.02 of its potential returns per unit of risk. The Dom Development SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15,451 in Dom Development SA on September 2, 2024 and sell it today you would earn a total of 4,249 from holding Dom Development SA or generate 27.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Dom Development SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Dom Development SA |
Polski Koncern and Dom Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Dom Development
The main advantage of trading using opposite Polski Koncern and Dom Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Dom Development 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 Dom Development will offset losses from the drop in Dom Development's long position.| Polski Koncern vs. Echo Investment SA | Polski Koncern vs. Esotiq Henderson SA | Polski Koncern vs. Asseco South Eastern | Polski Koncern vs. Vercom SA |
| Dom Development vs. PZ Cormay SA | Dom Development vs. Logintrade SA | Dom Development vs. MW Trade SA | Dom Development 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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