Correlation Between Tauron Polska and M Food
Can any of the company-specific risk be diversified away by investing in both Tauron Polska and M Food 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 M Food 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 M Food SA, you can compare the effects of market volatilities on Tauron Polska and M Food 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 M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tauron Polska and M Food.
Diversification Opportunities for Tauron Polska and M Food
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tauron and MFD is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tauron Polska Energia and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food 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 M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of Tauron Polska i.e., Tauron Polska and M Food go up and down completely randomly.
Pair Corralation between Tauron Polska and M Food
Assuming the 90 days trading horizon Tauron Polska Energia is expected to generate 0.53 times more return on investment than M Food. However, Tauron Polska Energia is 1.88 times less risky than M Food. It trades about 0.41 of its potential returns per unit of risk. M Food SA is currently generating about -0.23 per unit of risk. If you would invest 332.00 in Tauron Polska Energia on October 7, 2024 and sell it today you would earn a total of 59.00 from holding Tauron Polska Energia or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.35% |
| Values | Daily Returns |
Tauron Polska Energia vs. M Food SA
Performance |
| Timeline |
| Tauron Polska Energia |
| M Food SA |
Tauron Polska and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tauron Polska and M Food
The main advantage of trading using opposite Tauron Polska and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tauron Polska position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food'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 |
| M Food vs. Asseco Business Solutions | M Food vs. Detalion Games SA | M Food vs. Asseco South Eastern | M Food vs. Movie Games 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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