Correlation Between SOFTWARE MANSION and Bank Millennium
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Bank Millennium 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 SOFTWARE MANSION and Bank Millennium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTWARE MANSION SPOLKA and Bank Millennium SA, you can compare the effects of market volatilities on SOFTWARE MANSION and Bank Millennium 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 SOFTWARE MANSION with a short position of Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Bank Millennium.
Diversification Opportunities for SOFTWARE MANSION and Bank Millennium
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SOFTWARE and Bank is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium SA and SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA are associated (or correlated) with Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Bank Millennium go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and Bank Millennium
Assuming the 90 days trading horizon SOFTWARE MANSION is expected to generate 1.39 times less return on investment than Bank Millennium. In addition to that, SOFTWARE MANSION is 1.67 times more volatile than Bank Millennium SA. It trades about 0.03 of its total potential returns per unit of risk. Bank Millennium SA is currently generating about 0.06 per unit of volatility. If you would invest 470.00 in Bank Millennium SA on September 12, 2024 and sell it today you would earn a total of 418.00 from holding Bank Millennium SA or generate 88.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.63% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. Bank Millennium SA
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| Bank Millennium SA |
SOFTWARE MANSION and Bank Millennium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and Bank Millennium
The main advantage of trading using opposite SOFTWARE MANSION and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium's long position.| SOFTWARE MANSION vs. Banco Santander SA | SOFTWARE MANSION vs. UniCredit SpA | SOFTWARE MANSION vs. CEZ as | SOFTWARE MANSION vs. Polski Koncern Naftowy |
| Bank Millennium vs. UniCredit SpA | Bank Millennium vs. Santander Bank Polska | Bank Millennium vs. Bank Polska Kasa | Bank Millennium vs. ING Bank lski |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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