Correlation Between BANK CENTRAL and Polski Koncern

Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and Polski Koncern 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 BANK CENTRAL and Polski Koncern into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK CENTRAL ASIA and Polski Koncern Naftowy, you can compare the effects of market volatilities on BANK CENTRAL and Polski Koncern 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 BANK CENTRAL with a short position of Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and Polski Koncern.

Diversification Opportunities for BANK CENTRAL and Polski Koncern

0.67

Correlation Coefficient

BANK CENTRAL  Polski Koncern

Poor diversification

The 3 months correlation between BANK and Polski is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and Polski Koncern go up and down completely randomly.

Pair Corralation between BANK CENTRAL and Polski Koncern

Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to generate 0.55 times more return on investment than Polski Koncern. However, BANK CENTRAL ASIA is 1.82 times less risky than Polski Koncern. It trades about 0.02 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about 0.01 per unit of risk. If you would invest  54.00  in BANK CENTRAL ASIA on October 2, 2024 and sell it today you would earn a total of  1.00  from holding BANK CENTRAL ASIA or generate 1.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BANK CENTRAL ASIA  vs.  Polski Koncern Naftowy

BANK CENTRAL ASIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Polski Koncern Naftowy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polski Koncern Naftowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BANK CENTRAL and Polski Koncern

The main advantage of trading using opposite BANK CENTRAL and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern's long position.

The idea behind BANK CENTRAL ASIA and Polski Koncern Naftowy 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 Commodity Directory module to find actively traded commodities issued by global exchanges.