Correlation Between Text SA and Intersport Polska
Can any of the company-specific risk be diversified away by investing in both Text SA and Intersport Polska 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 Text SA and Intersport Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Text SA and Intersport Polska SA, you can compare the effects of market volatilities on Text SA and Intersport Polska 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 Text SA with a short position of Intersport Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Text SA and Intersport Polska.
Diversification Opportunities for Text SA and Intersport Polska
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Text and Intersport is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Text SA and Intersport Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intersport Polska and Text SA 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 Text SA are associated (or correlated) with Intersport Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intersport Polska has no effect on the direction of Text SA i.e., Text SA and Intersport Polska go up and down completely randomly.
Pair Corralation between Text SA and Intersport Polska
Assuming the 90 days trading horizon Text SA is expected to under-perform the Intersport Polska. But the stock apears to be less risky and, when comparing its historical volatility, Text SA is 2.04 times less risky than Intersport Polska. The stock trades about -0.06 of its potential returns per unit of risk. The Intersport Polska SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Intersport Polska SA on August 31, 2024 and sell it today you would lose (8.00) from holding Intersport Polska SA or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Text SA vs. Intersport Polska SA
Performance |
| Timeline |
| Text SA |
| Intersport Polska |
Text SA and Intersport Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Text SA and Intersport Polska
The main advantage of trading using opposite Text SA and Intersport Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Text SA position performs unexpectedly, Intersport Polska 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 Intersport Polska will offset losses from the drop in Intersport Polska's long position.| Text SA vs. Banco Santander SA | Text SA vs. UniCredit SpA | Text SA vs. CEZ as | Text SA vs. Polski Koncern Naftowy |
| Intersport Polska vs. Asseco Business Solutions | Intersport Polska vs. Detalion Games SA | Intersport Polska vs. Asseco South Eastern | Intersport Polska vs. CFI Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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