Correlation Between Intersport Polska and Notoria

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

Diversification Opportunities for Intersport Polska and Notoria

0.31

Correlation Coefficient

Intersport Polska  Notoria

Weak diversification

The 3 months correlation between Intersport and Notoria is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and Notoria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Notoria 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 Notoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Notoria has no effect on the direction of Intersport Polska i.e., Intersport Polska and Notoria go up and down completely randomly.

Pair Corralation between Intersport Polska and Notoria

Assuming the 90 days trading horizon Intersport Polska SA is expected to under-perform the Notoria. In addition to that, Intersport Polska is 6.5 times more volatile than Notoria. It trades about -0.16 of its total potential returns per unit of risk. Notoria is currently generating about 0.59 per unit of volatility. If you would invest  795.00  in Notoria on December 5, 2024 and sell it today you would earn a total of  30.00  from holding Notoria or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.27%
Values	Daily Returns

Intersport Polska SA  vs.  Notoria

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.

Notoria

Risk-Adjusted Performance

Weak

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

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

The idea behind Intersport Polska SA and Notoria 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.

Check out your portfolio center.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.