Correlation Between CD PROJEKT and Dino Polska

Can any of the company-specific risk be diversified away by investing in both CD PROJEKT and Dino 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 CD PROJEKT and Dino Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CD PROJEKT SA and Dino Polska SA, you can compare the effects of market volatilities on CD PROJEKT and Dino 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 CD PROJEKT with a short position of Dino Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD PROJEKT and Dino Polska.

Diversification Opportunities for CD PROJEKT and Dino Polska

-0.39

Correlation Coefficient

CD PROJEKT  Dino Polska

Very good diversification

The 3 months correlation between CDR and Dino is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CD PROJEKT SA and Dino Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dino Polska SA and CD PROJEKT 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 CD PROJEKT SA are associated (or correlated) with Dino Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dino Polska SA has no effect on the direction of CD PROJEKT i.e., CD PROJEKT and Dino Polska go up and down completely randomly.

Pair Corralation between CD PROJEKT and Dino Polska

Assuming the 90 days trading horizon CD PROJEKT SA is expected to under-perform the Dino Polska. But the stock apears to be less risky and, when comparing its historical volatility, CD PROJEKT SA is 1.5 times less risky than Dino Polska. The stock trades about -0.02 of its potential returns per unit of risk. The Dino Polska SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  31,400  in Dino Polska SA on September 4, 2024 and sell it today you would earn a total of  7,720  from holding Dino Polska SA or generate 24.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

CD PROJEKT SA  vs.  Dino Polska SA

CD PROJEKT SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dino Polska SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dino Polska SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Dino Polska reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CD PROJEKT and Dino Polska

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

The idea behind CD PROJEKT SA and Dino Polska SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.