Correlation Between Polski Koncern and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Polski Koncern and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Dow Jones.
Diversification Opportunities for Polski Koncern and Dow Jones
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polski and Dow is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Polski Koncern i.e., Polski Koncern and Dow Jones go up and down completely randomly.
Pair Corralation between Polski Koncern and Dow Jones
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 4.46 times more return on investment than Dow Jones. However, Polski Koncern is 4.46 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 641.00 in Polski Koncern Naftowy on August 26, 2024 and sell it today you would earn a total of 555.00 from holding Polski Koncern Naftowy or generate 86.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.22% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Dow Jones Industrial
Performance |
| Timeline |
Polski Koncern and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Polski Koncern Naftowy
Pair trading matchups for Polski Koncern
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Polski Koncern and Dow Jones
The main advantage of trading using opposite Polski Koncern and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Polski Koncern vs. MINCO SILVER | Polski Koncern vs. Tsingtao Brewery | Polski Koncern vs. American Eagle Outfitters | Polski Koncern vs. MAGNUM MINING EXP |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |