Correlation Between Dino Polska and Stalprodukt

Can any of the company-specific risk be diversified away by investing in both Dino Polska and Stalprodukt 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 Stalprodukt 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 Stalprodukt SA, you can compare the effects of market volatilities on Dino Polska and Stalprodukt 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 Stalprodukt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dino Polska and Stalprodukt.

Diversification Opportunities for Dino Polska and Stalprodukt

-0.72

Correlation Coefficient

Dino Polska  Stalprodukt

Pay attention - limited upside

The 3 months correlation between Dino and Stalprodukt is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dino Polska SA and Stalprodukt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stalprodukt 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 Stalprodukt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stalprodukt SA has no effect on the direction of Dino Polska i.e., Dino Polska and Stalprodukt go up and down completely randomly.

Pair Corralation between Dino Polska and Stalprodukt

Assuming the 90 days trading horizon Dino Polska SA is expected to generate 2.16 times more return on investment than Stalprodukt. However, Dino Polska is 2.16 times more volatile than Stalprodukt SA. It trades about 0.13 of its potential returns per unit of risk. Stalprodukt SA is currently generating about -0.17 per unit of risk. If you would invest  32,870  in Dino Polska SA on September 23, 2024 and sell it today you would earn a total of  6,690  from holding Dino Polska SA or generate 20.35% 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.  Stalprodukt SA

Dino Polska SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dino Polska SA are ranked lower than 9 (%) 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.

Stalprodukt SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stalprodukt SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Dino Polska and Stalprodukt

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

The idea behind Dino Polska SA and Stalprodukt 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.