Correlation Between Polski Koncern and Hydrapres
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Hydrapres 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 Hydrapres 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 Hydrapres, you can compare the effects of market volatilities on Polski Koncern and Hydrapres 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 Hydrapres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Hydrapres.
Diversification Opportunities for Polski Koncern and Hydrapres
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polski and Hydrapres is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Hydrapres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrapres 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 Hydrapres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrapres has no effect on the direction of Polski Koncern i.e., Polski Koncern and Hydrapres go up and down completely randomly.
Pair Corralation between Polski Koncern and Hydrapres
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the Hydrapres. In addition to that, Polski Koncern is 1.09 times more volatile than Hydrapres. It trades about -0.11 of its total potential returns per unit of risk. Hydrapres is currently generating about -0.04 per unit of volatility. If you would invest 43.00 in Hydrapres on August 30, 2024 and sell it today you would lose (1.00) from holding Hydrapres or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 69.05% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Hydrapres
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Hydrapres |
Polski Koncern and Hydrapres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Hydrapres
The main advantage of trading using opposite Polski Koncern and Hydrapres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Hydrapres 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 Hydrapres will offset losses from the drop in Hydrapres' long position.| Polski Koncern vs. Asseco Business Solutions | Polski Koncern vs. Detalion Games SA | Polski Koncern vs. CFI Holding SA | Polski Koncern vs. HM Inwest SA |
| Hydrapres vs. LSI Software SA | Hydrapres vs. SOFTWARE MANSION SPOLKA | Hydrapres vs. Medicalg | Hydrapres vs. Cloud Technologies 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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