Correlation Between Stalprodukt and CD PROJEKT
Can any of the company-specific risk be diversified away by investing in both Stalprodukt and CD PROJEKT 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 Stalprodukt and CD PROJEKT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stalprodukt SA and CD PROJEKT SA, you can compare the effects of market volatilities on Stalprodukt and CD PROJEKT 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 Stalprodukt with a short position of CD PROJEKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stalprodukt and CD PROJEKT.
Diversification Opportunities for Stalprodukt and CD PROJEKT
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stalprodukt and CDR is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Stalprodukt SA and CD PROJEKT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD PROJEKT SA and Stalprodukt 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 Stalprodukt SA are associated (or correlated) with CD PROJEKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD PROJEKT SA has no effect on the direction of Stalprodukt i.e., Stalprodukt and CD PROJEKT go up and down completely randomly.
Pair Corralation between Stalprodukt and CD PROJEKT
Assuming the 90 days trading horizon Stalprodukt SA is expected to under-perform the CD PROJEKT. But the stock apears to be less risky and, when comparing its historical volatility, Stalprodukt SA is 1.93 times less risky than CD PROJEKT. The stock trades about -0.33 of its potential returns per unit of risk. The CD PROJEKT SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,060 in CD PROJEKT SA on September 2, 2024 and sell it today you would earn a total of 660.00 from holding CD PROJEKT SA or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stalprodukt SA vs. CD PROJEKT SA
Performance |
| Timeline |
| Stalprodukt SA |
| CD PROJEKT SA |
Stalprodukt and CD PROJEKT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stalprodukt and CD PROJEKT
The main advantage of trading using opposite Stalprodukt and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stalprodukt position performs unexpectedly, CD PROJEKT 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 CD PROJEKT will offset losses from the drop in CD PROJEKT's long position.| Stalprodukt vs. Echo Investment SA | Stalprodukt vs. Esotiq Henderson SA | Stalprodukt vs. Asseco South Eastern | Stalprodukt vs. Vercom SA |
| CD PROJEKT vs. LPP SA | CD PROJEKT vs. Stalprodukt SA | CD PROJEKT vs. mBank SA | CD PROJEKT vs. Santander Bank Polska |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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