Correlation Between Polski Koncern and Text SA
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Text SA 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 Text SA 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 Text SA, you can compare the effects of market volatilities on Polski Koncern and Text SA 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 Text SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Text SA.
Diversification Opportunities for Polski Koncern and Text SA
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polski and Text is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Text SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Text 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 Text SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Text SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Text SA go up and down completely randomly.
Pair Corralation between Polski Koncern and Text SA
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 0.9 times more return on investment than Text SA. However, Polski Koncern Naftowy is 1.11 times less risky than Text SA. It trades about -0.06 of its potential returns per unit of risk. Text SA is currently generating about -0.06 per unit of risk. If you would invest 5,353 in Polski Koncern Naftowy on August 28, 2024 and sell it today you would lose (148.00) from holding Polski Koncern Naftowy or give up 2.76% 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. Text SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Text SA |
Polski Koncern and Text SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Text SA
The main advantage of trading using opposite Polski Koncern and Text SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Text SA 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 Text SA will offset losses from the drop in Text SA'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 |
| Text SA vs. Ultimate Games SA | Text SA vs. CI Games SA | Text SA vs. Live Motion Games | Text SA vs. True Games Syndicate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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