Correlation Between Powszechny Zaklad and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Powszechny Zaklad and Alior Bank 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 Powszechny Zaklad and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powszechny Zaklad Ubezpieczen and Alior Bank SA, you can compare the effects of market volatilities on Powszechny Zaklad and Alior Bank 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 Powszechny Zaklad with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powszechny Zaklad and Alior Bank.
Diversification Opportunities for Powszechny Zaklad and Alior Bank
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Powszechny and Alior is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Powszechny Zaklad Ubezpieczen and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Powszechny Zaklad 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 Powszechny Zaklad Ubezpieczen are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Powszechny Zaklad i.e., Powszechny Zaklad and Alior Bank go up and down completely randomly.
Pair Corralation between Powszechny Zaklad and Alior Bank
Assuming the 90 days trading horizon Powszechny Zaklad Ubezpieczen is expected to generate 0.74 times more return on investment than Alior Bank. However, Powszechny Zaklad Ubezpieczen is 1.35 times less risky than Alior Bank. It trades about 0.17 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.07 per unit of risk. If you would invest 4,055 in Powszechny Zaklad Ubezpieczen on August 27, 2024 and sell it today you would earn a total of 277.00 from holding Powszechny Zaklad Ubezpieczen or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powszechny Zaklad Ubezpieczen vs. Alior Bank SA
Performance |
| Timeline |
| Powszechny Zaklad |
| Alior Bank SA |
Powszechny Zaklad and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powszechny Zaklad and Alior Bank
The main advantage of trading using opposite Powszechny Zaklad and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powszechny Zaklad position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| Powszechny Zaklad vs. LSI Software SA | Powszechny Zaklad vs. Ultimate Games SA | Powszechny Zaklad vs. Detalion Games SA | Powszechny Zaklad vs. Gaming Factory SA |
| Alior Bank vs. New Tech Venture | Alior Bank vs. Igoria Trade SA | Alior Bank vs. PLAYWAY SA | Alior Bank vs. Creotech Instruments 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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