Correlation Between Dino Polska and Komputronik

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

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

Diversification Opportunities for Dino Polska and Komputronik

-0.66

Correlation Coefficient

Dino Polska  Komputronik

Excellent diversification

The 3 months correlation between Dino and Komputronik is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dino Polska SA and Komputronik SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komputronik SA and Dino Polska 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 Dino Polska SA are associated (or correlated) with Komputronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komputronik SA has no effect on the direction of Dino Polska i.e., Dino Polska and Komputronik go up and down completely randomly.

Pair Corralation between Dino Polska and Komputronik

Assuming the 90 days trading horizon Dino Polska SA is expected to generate 1.33 times more return on investment than Komputronik. However, Dino Polska is 1.33 times more volatile than Komputronik SA. It trades about 0.09 of its potential returns per unit of risk. Komputronik SA is currently generating about -0.01 per unit of risk. If you would invest  34,960  in Dino Polska SA on October 11, 2024 and sell it today you would earn a total of  4,180  from holding Dino Polska SA or generate 11.96% return on investment over 90 days.

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

Dino Polska SA  vs.  Komputronik SA

Dino Polska SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dino Polska SA are ranked lower than 7 (%) 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.

Komputronik SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dino Polska and Komputronik

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

The idea behind Dino Polska SA and Komputronik 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.