Correlation Between Polski Koncern and Bank Millennium
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Bank Millennium 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 Bank Millennium 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 Bank Millennium SA, you can compare the effects of market volatilities on Polski Koncern and Bank Millennium 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 Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Bank Millennium.
Diversification Opportunities for Polski Koncern and Bank Millennium
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Polski and Bank is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium 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 Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Bank Millennium go up and down completely randomly.
Pair Corralation between Polski Koncern and Bank Millennium
Assuming the 90 days trading horizon Polski Koncern is expected to generate 17.22 times less return on investment than Bank Millennium. But when comparing it to its historical volatility, Polski Koncern Naftowy is 1.38 times less risky than Bank Millennium. It trades about 0.01 of its potential returns per unit of risk. Bank Millennium SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 482.00 in Bank Millennium SA on November 2, 2024 and sell it today you would earn a total of 560.00 from holding Bank Millennium SA or generate 116.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Bank Millennium SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Bank Millennium SA |
Polski Koncern and Bank Millennium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Bank Millennium
The main advantage of trading using opposite Polski Koncern and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium'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 |
| Bank Millennium vs. UniCredit SpA | Bank Millennium vs. Santander Bank Polska | Bank Millennium vs. Bank Polska Kasa | Bank Millennium vs. ING Bank lski |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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