Correlation Between HM Inwest and Jastrzebska Spotka

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

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

Diversification Opportunities for HM Inwest and Jastrzebska Spotka

0.6

Correlation Coefficient

HM Inwest  Jastrzebska Spotka

Poor diversification

The 3 months correlation between HMI and Jastrzebska is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding HM Inwest SA and Jastrzebska Spotka Weglowa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jastrzebska Spotka and HM Inwest 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 HM Inwest SA are associated (or correlated) with Jastrzebska Spotka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jastrzebska Spotka has no effect on the direction of HM Inwest i.e., HM Inwest and Jastrzebska Spotka go up and down completely randomly.

Pair Corralation between HM Inwest and Jastrzebska Spotka

Assuming the 90 days trading horizon HM Inwest SA is expected to generate 1.24 times more return on investment than Jastrzebska Spotka. However, HM Inwest is 1.24 times more volatile than Jastrzebska Spotka Weglowa. It trades about 0.14 of its potential returns per unit of risk. Jastrzebska Spotka Weglowa is currently generating about 0.02 per unit of risk. If you would invest  3,690  in HM Inwest SA on August 30, 2024 and sell it today you would earn a total of  1,130  from holding HM Inwest SA or generate 30.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

HM Inwest SA  vs.  Jastrzebska Spotka Weglowa

HM Inwest SA

Risk-Adjusted Performance

11 of 100

Good

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

Jastrzebska Spotka

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jastrzebska Spotka Weglowa are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Jastrzebska Spotka 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 HM Inwest and Jastrzebska Spotka

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

The idea behind HM Inwest SA and Jastrzebska Spotka Weglowa 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.