Correlation Between Tauron Polska and Grupa KTY
Can any of the company-specific risk be diversified away by investing in both Tauron Polska and Grupa KTY 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 Tauron Polska and Grupa KTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tauron Polska Energia and Grupa KTY SA, you can compare the effects of market volatilities on Tauron Polska and Grupa KTY 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 Tauron Polska with a short position of Grupa KTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tauron Polska and Grupa KTY.
Diversification Opportunities for Tauron Polska and Grupa KTY
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tauron and Grupa is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tauron Polska Energia and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY SA and Tauron Polska 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 Tauron Polska Energia are associated (or correlated) with Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of Tauron Polska i.e., Tauron Polska and Grupa KTY go up and down completely randomly.
Pair Corralation between Tauron Polska and Grupa KTY
Assuming the 90 days trading horizon Tauron Polska Energia is expected to generate 0.92 times more return on investment than Grupa KTY. However, Tauron Polska Energia is 1.09 times less risky than Grupa KTY. It trades about 0.37 of its potential returns per unit of risk. Grupa KTY SA is currently generating about 0.05 per unit of risk. If you would invest 373.00 in Tauron Polska Energia on October 20, 2024 and sell it today you would earn a total of 27.00 from holding Tauron Polska Energia or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tauron Polska Energia vs. Grupa KTY SA
Performance |
| Timeline |
| Tauron Polska Energia |
| Grupa KTY SA |
Tauron Polska and Grupa KTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tauron Polska and Grupa KTY
The main advantage of trading using opposite Tauron Polska and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tauron Polska position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.| Tauron Polska vs. Banco Santander SA | Tauron Polska vs. UniCredit SpA | Tauron Polska vs. CEZ as | Tauron Polska vs. Polski Koncern Naftowy |
| Grupa KTY vs. AC SA | Grupa KTY vs. Tauron Polska Energia | Grupa KTY vs. CD PROJEKT SA | Grupa KTY vs. Dino Polska 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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