Correlation Between Polski Koncern and Selena FM
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Selena FM 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 Selena FM 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 Selena FM SA, you can compare the effects of market volatilities on Polski Koncern and Selena FM 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 Selena FM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Selena FM.
Diversification Opportunities for Polski Koncern and Selena FM
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polski and Selena is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Selena FM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selena FM 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 Selena FM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selena FM SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Selena FM go up and down completely randomly.
Pair Corralation between Polski Koncern and Selena FM
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 0.76 times more return on investment than Selena FM. However, Polski Koncern Naftowy is 1.32 times less risky than Selena FM. It trades about -0.07 of its potential returns per unit of risk. Selena FM SA is currently generating about -0.21 per unit of risk. If you would invest 5,296 in Polski Koncern Naftowy on August 30, 2024 and sell it today you would lose (167.00) from holding Polski Koncern Naftowy or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Selena FM SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Selena FM SA |
Polski Koncern and Selena FM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Selena FM
The main advantage of trading using opposite Polski Koncern and Selena FM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Selena FM 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 Selena FM will offset losses from the drop in Selena FM's long position.| Polski Koncern vs. Asseco Business Solutions | Polski Koncern vs. Detalion Games SA | Polski Koncern vs. CFI Holding SA | Polski Koncern vs. HM Inwest SA |
| Selena FM vs. Banco Santander SA | Selena FM vs. UniCredit SpA | Selena FM vs. CEZ as | Selena FM 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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