Correlation Between Polski Koncern and Gielda Papierow
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Gielda Papierow 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 Gielda Papierow 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 Gielda Papierow Wartosciowych, you can compare the effects of market volatilities on Polski Koncern and Gielda Papierow 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 Gielda Papierow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Gielda Papierow.
Diversification Opportunities for Polski Koncern and Gielda Papierow
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polski and Gielda is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Gielda Papierow Wartosciowych in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gielda Papierow Wart 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 Gielda Papierow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gielda Papierow Wart has no effect on the direction of Polski Koncern i.e., Polski Koncern and Gielda Papierow go up and down completely randomly.
Pair Corralation between Polski Koncern and Gielda Papierow
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the Gielda Papierow. In addition to that, Polski Koncern is 1.81 times more volatile than Gielda Papierow Wartosciowych. It trades about -0.03 of its total potential returns per unit of risk. Gielda Papierow Wartosciowych is currently generating about 0.04 per unit of volatility. If you would invest 4,265 in Gielda Papierow Wartosciowych on September 4, 2024 and sell it today you would earn a total of 35.00 from holding Gielda Papierow Wartosciowych or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Gielda Papierow Wartosciowych
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Gielda Papierow Wart |
Polski Koncern and Gielda Papierow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Gielda Papierow
The main advantage of trading using opposite Polski Koncern and Gielda Papierow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Gielda Papierow 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 Gielda Papierow will offset losses from the drop in Gielda Papierow'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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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