Correlation Between Intersport Polska and Dino Polska

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

Diversification Opportunities for Intersport Polska and Dino Polska

0.2

Correlation Coefficient

Intersport Polska  Dino Polska

Modest diversification

The 3 months correlation between Intersport and Dino is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and Dino Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dino Polska 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 Dino Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dino Polska SA has no effect on the direction of Intersport Polska i.e., Intersport Polska and Dino Polska go up and down completely randomly.

Pair Corralation between Intersport Polska and Dino Polska

Assuming the 90 days trading horizon Intersport Polska SA is expected to generate 6.71 times more return on investment than Dino Polska. However, Intersport Polska is 6.71 times more volatile than Dino Polska SA. It trades about -0.01 of its potential returns per unit of risk. Dino Polska SA is currently generating about -0.05 per unit of risk. If you would invest  67.00  in Intersport Polska SA on October 12, 2024 and sell it today you would lose (5.00) from holding Intersport Polska SA or give up 7.46% of portfolio value over 90 days.

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

Intersport Polska SA  vs.  Dino Polska SA

Intersport Polska

Risk-Adjusted Performance

1 of 100

Weak

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

Dino Polska SA

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Intersport Polska and Dino Polska

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

The idea behind Intersport Polska SA and Dino Polska 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.