Correlation Between SOFTWARE MANSION and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Polski Koncern 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 Polski Koncern 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 Polski Koncern Naftowy, you can compare the effects of market volatilities on SOFTWARE MANSION and Polski Koncern 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 Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Polski Koncern.
Diversification Opportunities for SOFTWARE MANSION and Polski Koncern
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SOFTWARE and Polski is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy 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 Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Polski Koncern go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and Polski Koncern
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to generate 2.36 times more return on investment than Polski Koncern. However, SOFTWARE MANSION is 2.36 times more volatile than Polski Koncern Naftowy. It trades about 0.02 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about 0.01 per unit of risk. If you would invest 2,896 in SOFTWARE MANSION SPOLKA on November 2, 2024 and sell it today you would earn a total of 4.00 from holding SOFTWARE MANSION SPOLKA or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.06% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. Polski Koncern Naftowy
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| Polski Koncern Naftowy |
SOFTWARE MANSION and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and Polski Koncern
The main advantage of trading using opposite SOFTWARE MANSION and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern'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 |
| Polski Koncern vs. Santander Bank Polska | Polski Koncern vs. M Food SA | Polski Koncern vs. Movie Games SA | Polski Koncern vs. PZ Cormay 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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