Correlation Between Polski Koncern and Wikana SA
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Wikana 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 Wikana 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 Wikana SA, you can compare the effects of market volatilities on Polski Koncern and Wikana 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 Wikana SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Wikana SA.
Diversification Opportunities for Polski Koncern and Wikana SA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Polski and Wikana is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Wikana SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wikana 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 Wikana SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wikana SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Wikana SA go up and down completely randomly.
Pair Corralation between Polski Koncern and Wikana SA
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 0.73 times more return on investment than Wikana SA. However, Polski Koncern Naftowy is 1.36 times less risky than Wikana SA. It trades about 0.18 of its potential returns per unit of risk. Wikana SA is currently generating about -0.24 per unit of risk. If you would invest 5,039 in Polski Koncern Naftowy on September 12, 2024 and sell it today you would earn a total of 283.00 from holding Polski Koncern Naftowy or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Wikana SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Wikana SA |
Polski Koncern and Wikana SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Wikana SA
The main advantage of trading using opposite Polski Koncern and Wikana SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Wikana 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 Wikana SA will offset losses from the drop in Wikana 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. HM Inwest SA |
| Wikana SA vs. Banco Santander SA | Wikana SA vs. UniCredit SpA | Wikana SA vs. CEZ as | Wikana SA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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