Correlation Between Polski Koncern and Pepco Group
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Pepco Group 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 Pepco Group 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 Pepco Group BV, you can compare the effects of market volatilities on Polski Koncern and Pepco Group 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 Pepco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Pepco Group.
Diversification Opportunities for Polski Koncern and Pepco Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polski and Pepco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Pepco Group BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pepco Group BV 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 Pepco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pepco Group BV has no effect on the direction of Polski Koncern i.e., Polski Koncern and Pepco Group go up and down completely randomly.
Pair Corralation between Polski Koncern and Pepco Group
Assuming the 90 days trading horizon Polski Koncern is expected to generate 1.65 times less return on investment than Pepco Group. But when comparing it to its historical volatility, Polski Koncern Naftowy is 1.74 times less risky than Pepco Group. It trades about 0.08 of its potential returns per unit of risk. Pepco Group BV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,610 in Pepco Group BV on November 3, 2024 and sell it today you would earn a total of 116.00 from holding Pepco Group BV or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Pepco Group BV
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Pepco Group BV |
Polski Koncern and Pepco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Pepco Group
The main advantage of trading using opposite Polski Koncern and Pepco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Pepco Group 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 Pepco Group will offset losses from the drop in Pepco Group'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 |
| Pepco Group vs. Gamedust SA | Pepco Group vs. X Trade Brokers | Pepco Group vs. Centrum Finansowe Banku | Pepco Group vs. Alior Bank 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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