Correlation Between Polski Koncern and PKP Cargo
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and PKP Cargo 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 PKP Cargo 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 PKP Cargo SA, you can compare the effects of market volatilities on Polski Koncern and PKP Cargo 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 PKP Cargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and PKP Cargo.
Diversification Opportunities for Polski Koncern and PKP Cargo
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polski and PKP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and PKP Cargo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKP Cargo 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 PKP Cargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKP Cargo SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and PKP Cargo go up and down completely randomly.
Pair Corralation between Polski Koncern and PKP Cargo
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the PKP Cargo. But the stock apears to be less risky and, when comparing its historical volatility, Polski Koncern Naftowy is 2.39 times less risky than PKP Cargo. The stock trades about -0.07 of its potential returns per unit of risk. The PKP Cargo SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,458 in PKP Cargo SA on September 1, 2024 and sell it today you would lose (76.00) from holding PKP Cargo SA or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. PKP Cargo SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| PKP Cargo SA |
Polski Koncern and PKP Cargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and PKP Cargo
The main advantage of trading using opposite Polski Koncern and PKP Cargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, PKP Cargo 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 PKP Cargo will offset losses from the drop in PKP Cargo's long position.| Polski Koncern vs. UF Games SA | Polski Koncern vs. MW Trade SA | Polski Koncern vs. Centrum Finansowe Banku | Polski Koncern vs. X Trade Brokers |
| PKP Cargo vs. Banco Santander SA | PKP Cargo vs. UniCredit SpA | PKP Cargo vs. CEZ as | PKP Cargo 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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