Correlation Between Polski Koncern and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on Polski Koncern and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and KGHM Polska.
Diversification Opportunities for Polski Koncern and KGHM Polska
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polski and KGHM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Polski Koncern i.e., Polski Koncern and KGHM Polska go up and down completely randomly.
Pair Corralation between Polski Koncern and KGHM Polska
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 0.98 times more return on investment than KGHM Polska. However, Polski Koncern Naftowy is 1.02 times less risky than KGHM Polska. It trades about 0.08 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.05 per unit of risk. If you would invest 5,133 in Polski Koncern Naftowy on November 3, 2024 and sell it today you would earn a total of 246.00 from holding Polski Koncern Naftowy or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. KGHM Polska Miedz
Performance |
| Timeline |
| Polski Koncern Naftowy |
| KGHM Polska Miedz |
Polski Koncern and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and KGHM Polska
The main advantage of trading using opposite Polski Koncern and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Polski Koncern vs. TEN SQUARE GAMES | Polski Koncern vs. Bank Millennium SA | Polski Koncern vs. Vivid Games SA | Polski Koncern vs. BNP Paribas Bank |
| KGHM Polska vs. ING Bank lski | KGHM Polska vs. SOFTWARE MANSION SPOLKA | KGHM Polska vs. Igoria Trade SA | KGHM Polska vs. UniCredit SpA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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