Correlation Between Polski Koncern and Wielton SA
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Wielton 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 Wielton 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 Wielton SA, you can compare the effects of market volatilities on Polski Koncern and Wielton 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 Wielton SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Wielton SA.
Diversification Opportunities for Polski Koncern and Wielton SA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polski and Wielton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Wielton SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wielton 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 Wielton SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wielton SA has no effect on the direction of Polski Koncern i.e., Polski Koncern and Wielton SA go up and down completely randomly.
Pair Corralation between Polski Koncern and Wielton SA
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 0.86 times more return on investment than Wielton SA. However, Polski Koncern Naftowy is 1.17 times less risky than Wielton SA. It trades about 0.0 of its potential returns per unit of risk. Wielton SA is currently generating about -0.02 per unit of risk. If you would invest 5,648 in Polski Koncern Naftowy on August 26, 2024 and sell it today you would lose (465.00) from holding Polski Koncern Naftowy or give up 8.23% 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. Wielton SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Wielton SA |
Polski Koncern and Wielton SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Wielton SA
The main advantage of trading using opposite Polski Koncern and Wielton SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Wielton 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 Wielton SA will offset losses from the drop in Wielton 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 |
| Wielton SA vs. Asseco South Eastern | Wielton SA vs. Vercom SA | Wielton SA vs. CFI Holding SA | Wielton SA vs. Gobarto 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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