Correlation Between Polski Koncern and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both Polski Koncern and Neste Oyj 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 Neste Oyj 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 Neste Oyj, you can compare the effects of market volatilities on Polski Koncern and Neste Oyj 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 Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and Neste Oyj.
Diversification Opportunities for Polski Koncern and Neste Oyj
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polski and Neste is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj 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 Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of Polski Koncern i.e., Polski Koncern and Neste Oyj go up and down completely randomly.
Pair Corralation between Polski Koncern and Neste Oyj
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to generate 1.07 times more return on investment than Neste Oyj. However, Polski Koncern is 1.07 times more volatile than Neste Oyj. It trades about 0.04 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.11 per unit of risk. If you would invest 985.00 in Polski Koncern Naftowy on August 25, 2024 and sell it today you would earn a total of 211.00 from holding Polski Koncern Naftowy or generate 21.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. Neste Oyj
Performance |
| Timeline |
| Polski Koncern Naftowy |
| Neste Oyj |
Polski Koncern and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and Neste Oyj
The main advantage of trading using opposite Polski Koncern and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| Polski Koncern vs. MINCO SILVER | Polski Koncern vs. Tsingtao Brewery | Polski Koncern vs. American Eagle Outfitters | Polski Koncern vs. MAGNUM MINING EXP |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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