Correlation Between Intersport Polska and Comp SA

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

Diversification Opportunities for Intersport Polska and Comp SA

0.12

Correlation Coefficient

Intersport Polska  Comp SA

Average diversification

The 3 months correlation between Intersport and Comp is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and Comp SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comp SA 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 Comp SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comp SA has no effect on the direction of Intersport Polska i.e., Intersport Polska and Comp SA go up and down completely randomly.

Pair Corralation between Intersport Polska and Comp SA

Assuming the 90 days trading horizon Intersport Polska SA is expected to generate 3.34 times more return on investment than Comp SA. However, Intersport Polska is 3.34 times more volatile than Comp SA. It trades about 0.04 of its potential returns per unit of risk. Comp SA is currently generating about 0.01 per unit of risk. If you would invest  69.00  in Intersport Polska SA on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Intersport Polska SA or generate 5.8% return on investment over 90 days.

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

Intersport Polska SA  vs.  Comp SA

Intersport Polska

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intersport Polska SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Intersport Polska reported solid returns over the last few months and may actually be approaching a breakup point.

Comp SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comp SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Comp SA 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 Intersport Polska and Comp SA

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

The idea behind Intersport Polska SA and Comp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..