Correlation Between Vercom SA and Poznanska Korporacja
Can any of the company-specific risk be diversified away by investing in both Vercom SA and Poznanska Korporacja 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 Vercom SA and Poznanska Korporacja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vercom SA and Poznanska Korporacja Budowlana, you can compare the effects of market volatilities on Vercom SA and Poznanska Korporacja 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 Vercom SA with a short position of Poznanska Korporacja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vercom SA and Poznanska Korporacja.
Diversification Opportunities for Vercom SA and Poznanska Korporacja
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vercom and Poznanska is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vercom SA and Poznanska Korporacja Budowlana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poznanska Korporacja and Vercom 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 Vercom SA are associated (or correlated) with Poznanska Korporacja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poznanska Korporacja has no effect on the direction of Vercom SA i.e., Vercom SA and Poznanska Korporacja go up and down completely randomly.
Pair Corralation between Vercom SA and Poznanska Korporacja
Assuming the 90 days trading horizon Vercom SA is expected to generate 0.93 times more return on investment than Poznanska Korporacja. However, Vercom SA is 1.08 times less risky than Poznanska Korporacja. It trades about -0.06 of its potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about -0.41 per unit of risk. If you would invest 12,050 in Vercom SA on September 13, 2024 and sell it today you would lose (300.00) from holding Vercom SA or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vercom SA vs. Poznanska Korporacja Budowlana
Performance |
| Timeline |
| Vercom SA |
| Poznanska Korporacja |
Vercom SA and Poznanska Korporacja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vercom SA and Poznanska Korporacja
The main advantage of trading using opposite Vercom SA and Poznanska Korporacja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vercom SA position performs unexpectedly, Poznanska Korporacja 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 Poznanska Korporacja will offset losses from the drop in Poznanska Korporacja's long position.| Vercom SA vs. Banco Santander SA | Vercom SA vs. UniCredit SpA | Vercom SA vs. CEZ as | Vercom SA vs. Polski Koncern Naftowy |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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