Correlation Between Polski Koncern and Herkules
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Herkules 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 Herkules 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 Herkules SA, you can compare the effects of market volatilities on Polski Koncern and Herkules 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 Herkules. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Herkules.
Diversification Opportunities for Polski Koncern and Herkules
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polski and Herkules is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Herkules SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herkules 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 Herkules. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herkules SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Herkules go up and down completely randomly.
Pair Corralation between Polski Koncern and Herkules
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 0.42 times more return on investment than Herkules. However, Polski Koncern Naftowy is 2.36 times less risky than Herkules. It trades about 0.01 of its potential returns per unit of risk. Herkules SA is currently generating about -0.01 per unit of risk. If you would invest 5,995 in Polski Koncern Naftowy on November 28, 2024 and sell it today you would earn a total of 70.00 from holding Polski Koncern Naftowy or generate 1.17% 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. Herkules SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Herkules SA |
Polski Koncern and Herkules Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Herkules
The main advantage of trading using opposite Polski Koncern and Herkules positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Herkules 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 Herkules will offset losses from the drop in Herkules' long position.| Polski Koncern vs. Mercator Medical SA | Polski Koncern vs. Saule Technologies SA | Polski Koncern vs. PMPG Polskie Media | Polski Koncern vs. Skyline Investment SA |
| Herkules vs. Alior Bank SA | Herkules vs. Movie Games SA | Herkules vs. Marie Brizard Wine | Herkules vs. Creotech Instruments 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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