Correlation Between Road Studio and WSE WIG
Can any of the company-specific risk be diversified away by investing in both Road Studio and WSE WIG 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 Road Studio and WSE WIG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Road Studio SA and WSE WIG INDEX, you can compare the effects of market volatilities on Road Studio and WSE WIG 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 Road Studio with a short position of WSE WIG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Road Studio and WSE WIG.
Diversification Opportunities for Road Studio and WSE WIG
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Road and WSE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Road Studio SA and WSE WIG INDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSE WIG INDEX and Road Studio 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 Road Studio SA are associated (or correlated) with WSE WIG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSE WIG INDEX has no effect on the direction of Road Studio i.e., Road Studio and WSE WIG go up and down completely randomly.
Pair Corralation between Road Studio and WSE WIG
Assuming the 90 days trading horizon Road Studio SA is expected to under-perform the WSE WIG. In addition to that, Road Studio is 3.94 times more volatile than WSE WIG INDEX. It trades about -0.26 of its total potential returns per unit of risk. WSE WIG INDEX is currently generating about 0.02 per unit of volatility. If you would invest 8,086,173 in WSE WIG INDEX on September 4, 2024 and sell it today you would earn a total of 21,103 from holding WSE WIG INDEX or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Road Studio SA vs. WSE WIG INDEX
Performance |
| Timeline |
Road Studio and WSE WIG Volatility Contrast
Predicted Return Density |
| Returns |
Road Studio SA
Pair trading matchups for Road Studio
WSE WIG INDEX
Pair trading matchups for WSE WIG
Pair Trading with Road Studio and WSE WIG
The main advantage of trading using opposite Road Studio and WSE WIG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Road Studio position performs unexpectedly, WSE WIG 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 WSE WIG will offset losses from the drop in WSE WIG's long position.| Road Studio vs. Poznanska Korporacja Budowlana | Road Studio vs. Esotiq Henderson SA | Road Studio vs. Toya SA | Road Studio vs. Betacom SA |
| WSE WIG vs. Logintrade SA | WSE WIG vs. True Games Syndicate | WSE WIG vs. Mlk Foods Public | WSE WIG vs. GreenX Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |