Correlation Between Intersport Polska and Carlson Investments

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

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

Diversification Opportunities for Intersport Polska and Carlson Investments

0.08

Correlation Coefficient

Intersport Polska  Carlson Investments

Significant diversification

The 3 months correlation between Intersport and Carlson is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and Intersport 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 Intersport Polska SA are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Intersport Polska i.e., Intersport Polska and Carlson Investments go up and down completely randomly.

Pair Corralation between Intersport Polska and Carlson Investments

Assuming the 90 days trading horizon Intersport Polska SA is expected to under-perform the Carlson Investments. But the stock apears to be less risky and, when comparing its historical volatility, Intersport Polska SA is 1.12 times less risky than Carlson Investments. The stock trades about -0.12 of its potential returns per unit of risk. The Carlson Investments SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  447.00  in Carlson Investments SA on December 1, 2024 and sell it today you would lose (29.00) from holding Carlson Investments SA or give up 6.49% of portfolio value over 90 days.

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

Intersport Polska SA  vs.  Carlson Investments SA

Intersport Polska

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intersport Polska 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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Carlson Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carlson Investments SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Carlson Investments may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Intersport Polska and Carlson Investments

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

The idea behind Intersport Polska SA and Carlson Investments 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.