Correlation Between Ultimate Games and Powszechny Zaklad

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Can any of the company-specific risk be diversified away by investing in both Ultimate Games and Powszechny Zaklad 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 Ultimate Games and Powszechny Zaklad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultimate Games SA and Powszechny Zaklad Ubezpieczen, you can compare the effects of market volatilities on Ultimate Games and Powszechny Zaklad 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 Ultimate Games with a short position of Powszechny Zaklad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimate Games and Powszechny Zaklad.

Diversification Opportunities for Ultimate Games and Powszechny Zaklad

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ultimate and Powszechny is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ultimate Games SA and Powszechny Zaklad Ubezpieczen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechny Zaklad and Ultimate Games 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 Ultimate Games SA are associated (or correlated) with Powszechny Zaklad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechny Zaklad has no effect on the direction of Ultimate Games i.e., Ultimate Games and Powszechny Zaklad go up and down completely randomly.

Pair Corralation between Ultimate Games and Powszechny Zaklad

Assuming the 90 days trading horizon Ultimate Games SA is expected to under-perform the Powszechny Zaklad. But the stock apears to be less risky and, when comparing its historical volatility, Ultimate Games SA is 1.16 times less risky than Powszechny Zaklad. The stock trades about -0.2 of its potential returns per unit of risk. The Powszechny Zaklad Ubezpieczen is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,364  in Powszechny Zaklad Ubezpieczen on August 31, 2024 and sell it today you would lose (80.00) from holding Powszechny Zaklad Ubezpieczen or give up 1.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ultimate Games SA  vs.  Powszechny Zaklad Ubezpieczen

 Performance 
       Timeline  
Ultimate Games SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ultimate Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
Powszechny Zaklad 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Powszechny Zaklad Ubezpieczen has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Powszechny Zaklad is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Ultimate Games and Powszechny Zaklad Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ultimate Games and Powszechny Zaklad

The main advantage of trading using opposite Ultimate Games and Powszechny Zaklad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimate Games position performs unexpectedly, Powszechny Zaklad 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 Powszechny Zaklad will offset losses from the drop in Powszechny Zaklad's long position.
The idea behind Ultimate Games SA and Powszechny Zaklad Ubezpieczen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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