Correlation Between Centrum Finansowe and PCC Rokita

Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and PCC Rokita 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 Centrum Finansowe and PCC Rokita into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Centrum Finansowe Banku and PCC Rokita SA, you can compare the effects of market volatilities on Centrum Finansowe and PCC Rokita 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 Centrum Finansowe with a short position of PCC Rokita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and PCC Rokita.

Diversification Opportunities for Centrum Finansowe and PCC Rokita

-0.36

Correlation Coefficient

Centrum Finansowe  PCC Rokita

Very good diversification

The 3 months correlation between Centrum and PCC is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and PCC Rokita SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCC Rokita SA and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with PCC Rokita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCC Rokita SA has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and PCC Rokita go up and down completely randomly.

Pair Corralation between Centrum Finansowe and PCC Rokita

Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to under-perform the PCC Rokita. In addition to that, Centrum Finansowe is 1.78 times more volatile than PCC Rokita SA. It trades about -0.07 of its total potential returns per unit of risk. PCC Rokita SA is currently generating about 0.16 per unit of volatility. If you would invest  6,710  in PCC Rokita SA on December 23, 2024 and sell it today you would earn a total of  840.00  from holding PCC Rokita SA or generate 12.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Centrum Finansowe Banku  vs.  PCC Rokita SA

Centrum Finansowe Banku

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centrum Finansowe Banku has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

PCC Rokita SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PCC Rokita SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, PCC Rokita reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centrum Finansowe and PCC Rokita

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

The idea behind Centrum Finansowe Banku and PCC Rokita 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.