Correlation Between Polski Koncern and Echo Investment
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Echo Investment 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 Echo Investment 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 Echo Investment SA, you can compare the effects of market volatilities on Polski Koncern and Echo Investment 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 Echo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Echo Investment.
Diversification Opportunities for Polski Koncern and Echo Investment
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polski and Echo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Echo Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Investment 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 Echo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Investment SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Echo Investment go up and down completely randomly.
Pair Corralation between Polski Koncern and Echo Investment
Assuming the 90 days trading horizon Polski Koncern is expected to generate 8.06 times less return on investment than Echo Investment. But when comparing it to its historical volatility, Polski Koncern Naftowy is 1.01 times less risky than Echo Investment. It trades about 0.01 of its potential returns per unit of risk. Echo Investment SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Echo Investment SA on November 2, 2024 and sell it today you would earn a total of 129.00 from holding Echo Investment SA or generate 42.02% 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. Echo Investment SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Echo Investment SA |
Polski Koncern and Echo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Echo Investment
The main advantage of trading using opposite Polski Koncern and Echo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Echo Investment 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 Echo Investment will offset losses from the drop in Echo Investment's long position.| Polski Koncern vs. Santander Bank Polska | Polski Koncern vs. M Food SA | Polski Koncern vs. Movie Games SA | Polski Koncern vs. PZ Cormay SA |
| Echo Investment vs. Enter Air SA | Echo Investment vs. Mlk Foods Public | Echo Investment vs. Inter Cars SA | Echo Investment vs. Creativeforge 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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