Correlation Between Gobarto SA and Powszechny Zaklad

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

By analyzing existing cross correlation between Gobarto SA and Powszechny Zaklad Ubezpieczen, you can compare the effects of market volatilities on Gobarto SA and Powszechny Zaklad 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 Powszechny Zaklad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gobarto SA and Powszechny Zaklad.

Diversification Opportunities for Gobarto SA and Powszechny Zaklad

-0.65

Correlation Coefficient

Gobarto SA  Powszechny Zaklad

Excellent diversification

The 3 months correlation between Gobarto and Powszechny is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gobarto SA and Powszechny Zaklad Ubezpieczen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechny Zaklad 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 Powszechny Zaklad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechny Zaklad has no effect on the direction of Gobarto SA i.e., Gobarto SA and Powszechny Zaklad go up and down completely randomly.

Pair Corralation between Gobarto SA and Powszechny Zaklad

Assuming the 90 days trading horizon Gobarto SA is expected to under-perform the Powszechny Zaklad. In addition to that, Gobarto SA is 1.78 times more volatile than Powszechny Zaklad Ubezpieczen. It trades about -0.17 of its total potential returns per unit of risk. Powszechny Zaklad Ubezpieczen is currently generating about 0.14 per unit of volatility. If you would invest  4,111  in Powszechny Zaklad Ubezpieczen on October 5, 2024 and sell it today you would earn a total of  565.00  from holding Powszechny Zaklad Ubezpieczen or generate 13.74% return on investment over 90 days.

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

Gobarto SA  vs.  Powszechny Zaklad Ubezpieczen

Gobarto SA

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Powszechny Zaklad

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechny Zaklad Ubezpieczen are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechny Zaklad reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gobarto SA and Powszechny Zaklad

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

The idea behind Gobarto SA and Powszechny Zaklad Ubezpieczen 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.