Correlation Between Polski Koncern and OrangePL
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and OrangePL 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 OrangePL 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 OrangePL, you can compare the effects of market volatilities on Polski Koncern and OrangePL 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 OrangePL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and OrangePL.
Diversification Opportunities for Polski Koncern and OrangePL
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polski and OrangePL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and OrangePL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrangePL 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 OrangePL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrangePL has no effect on the direction of Polski Koncern i.e., Polski Koncern and OrangePL go up and down completely randomly.
Pair Corralation between Polski Koncern and OrangePL
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the OrangePL. In addition to that, Polski Koncern is 1.19 times more volatile than OrangePL. It trades about -0.06 of its total potential returns per unit of risk. OrangePL is currently generating about 0.02 per unit of volatility. If you would invest 741.00 in OrangePL on August 28, 2024 and sell it today you would earn a total of 27.00 from holding OrangePL or generate 3.64% 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. OrangePL
Performance |
| Timeline |
| Polski Koncern Naftowy |
| OrangePL |
Polski Koncern and OrangePL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and OrangePL
The main advantage of trading using opposite Polski Koncern and OrangePL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, OrangePL 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 OrangePL will offset losses from the drop in OrangePL's long position.| Polski Koncern vs. Asseco Business Solutions | Polski Koncern vs. Detalion Games SA | Polski Koncern vs. Asseco South Eastern | Polski Koncern vs. Movie Games SA |
| OrangePL vs. Banco Santander SA | OrangePL vs. UniCredit SpA | OrangePL vs. CEZ as | OrangePL vs. Polski Koncern Naftowy |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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