Correlation Between Jastrzebska Spotka and HiProMine

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

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

Diversification Opportunities for Jastrzebska Spotka and HiProMine

0.47

Correlation Coefficient

Jastrzebska Spotka  HiProMine

Very weak diversification

The 3 months correlation between Jastrzebska and HiProMine is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jastrzebska Spotka Weglowa and HiProMine SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HiProMine SA and Jastrzebska Spotka 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 Jastrzebska Spotka Weglowa are associated (or correlated) with HiProMine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HiProMine SA has no effect on the direction of Jastrzebska Spotka i.e., Jastrzebska Spotka and HiProMine go up and down completely randomly.

Pair Corralation between Jastrzebska Spotka and HiProMine

Assuming the 90 days trading horizon Jastrzebska Spotka is expected to generate 5.43 times less return on investment than HiProMine. But when comparing it to its historical volatility, Jastrzebska Spotka Weglowa is 1.39 times less risky than HiProMine. It trades about 0.02 of its potential returns per unit of risk. HiProMine SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  19,000  in HiProMine SA on November 29, 2024 and sell it today you would earn a total of  3,500  from holding HiProMine SA or generate 18.42% return on investment over 90 days.

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

Jastrzebska Spotka Weglowa  vs.  HiProMine SA

Jastrzebska Spotka

Risk-Adjusted Performance

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.

HiProMine SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HiProMine SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HiProMine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jastrzebska Spotka and HiProMine

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

The idea behind Jastrzebska Spotka Weglowa and HiProMine 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.