Correlation Between Kogeneracja and Adiuvo Investment

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

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

Diversification Opportunities for Kogeneracja and Adiuvo Investment

0.28

Correlation Coefficient

Kogeneracja  Adiuvo Investment

Modest diversification

The 3 months correlation between Kogeneracja and Adiuvo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kogeneracja SA and Adiuvo Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adiuvo Investment and Kogeneracja 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 Kogeneracja SA are associated (or correlated) with Adiuvo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adiuvo Investment has no effect on the direction of Kogeneracja i.e., Kogeneracja and Adiuvo Investment go up and down completely randomly.

Pair Corralation between Kogeneracja and Adiuvo Investment

Assuming the 90 days trading horizon Kogeneracja is expected to generate 168.35 times less return on investment than Adiuvo Investment. But when comparing it to its historical volatility, Kogeneracja SA is 3.52 times less risky than Adiuvo Investment. It trades about 0.0 of its potential returns per unit of risk. Adiuvo Investment SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Adiuvo Investment SA on September 4, 2024 and sell it today you would earn a total of  4.00  from holding Adiuvo Investment SA or generate 12.12% return on investment over 90 days.

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

Kogeneracja SA  vs.  Adiuvo Investment SA

Kogeneracja SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kogeneracja SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kogeneracja is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Adiuvo Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adiuvo Investment SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Adiuvo Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kogeneracja and Adiuvo Investment

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

The idea behind Kogeneracja SA and Adiuvo Investment 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.