Correlation Between Gobarto SA and Poznanska Korporacja

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

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

Diversification Opportunities for Gobarto SA and Poznanska Korporacja

-0.54

Correlation Coefficient

Gobarto SA  Poznanska Korporacja

Excellent diversification

The 3 months correlation between Gobarto and Poznanska is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gobarto SA and Poznanska Korporacja Budowlana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poznanska Korporacja and Gobarto SA 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 Gobarto SA are associated (or correlated) with Poznanska Korporacja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poznanska Korporacja has no effect on the direction of Gobarto SA i.e., Gobarto SA and Poznanska Korporacja go up and down completely randomly.

Pair Corralation between Gobarto SA and Poznanska Korporacja

Assuming the 90 days trading horizon Gobarto SA is expected to under-perform the Poznanska Korporacja. In addition to that, Gobarto SA is 1.8 times more volatile than Poznanska Korporacja Budowlana. It trades about -0.02 of its total potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about 0.12 per unit of volatility. If you would invest  1,750  in Poznanska Korporacja Budowlana on December 25, 2024 and sell it today you would earn a total of  280.00  from holding Poznanska Korporacja Budowlana or generate 16.0% return on investment over 90 days.

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

Gobarto SA  vs.  Poznanska Korporacja Budowlana

Gobarto SA

Risk-Adjusted Performance

Very Weak

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

Poznanska Korporacja

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Poznanska Korporacja Budowlana are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Poznanska Korporacja reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gobarto SA and Poznanska Korporacja

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

The idea behind Gobarto SA and Poznanska Korporacja Budowlana 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.