Correlation Between Jastrzebska Spotka and Novina SA

Can any of the company-specific risk be diversified away by investing in both Jastrzebska Spotka and Novina 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 Jastrzebska Spotka and Novina SA 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 Novina SA, you can compare the effects of market volatilities on Jastrzebska Spotka and Novina 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 Jastrzebska Spotka with a short position of Novina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jastrzebska Spotka and Novina SA.

Diversification Opportunities for Jastrzebska Spotka and Novina SA

0.38

Correlation Coefficient

Jastrzebska Spotka  Novina SA

Weak diversification

The 3 months correlation between Jastrzebska and Novina is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jastrzebska Spotka Weglowa and Novina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novina 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 Novina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novina SA has no effect on the direction of Jastrzebska Spotka i.e., Jastrzebska Spotka and Novina SA go up and down completely randomly.

Pair Corralation between Jastrzebska Spotka and Novina SA

Assuming the 90 days trading horizon Jastrzebska Spotka Weglowa is expected to under-perform the Novina SA. But the stock apears to be less risky and, when comparing its historical volatility, Jastrzebska Spotka Weglowa is 2.63 times less risky than Novina SA. The stock trades about -0.07 of its potential returns per unit of risk. The Novina SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Novina SA on October 22, 2024 and sell it today you would earn a total of  60.00  from holding Novina SA or generate 90.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.37%
Values	Daily Returns

Jastrzebska Spotka Weglowa  vs.  Novina SA

Jastrzebska Spotka

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jastrzebska Spotka Weglowa 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Novina SA

Risk-Adjusted Performance

0 of 100

Weak

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

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

The idea behind Jastrzebska Spotka Weglowa and Novina 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.