Correlation Between LSI Software and Poznanska Korporacja

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

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

Diversification Opportunities for LSI Software and Poznanska Korporacja

0.38

Correlation Coefficient

LSI Software  Poznanska Korporacja

Weak diversification

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

Pair Corralation between LSI Software and Poznanska Korporacja

Assuming the 90 days trading horizon LSI Software is expected to generate 1.63 times less return on investment than Poznanska Korporacja. In addition to that, LSI Software is 1.23 times more volatile than Poznanska Korporacja Budowlana. It trades about 0.03 of its total potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about 0.07 per unit of volatility. If you would invest  1,770  in Poznanska Korporacja Budowlana on December 30, 2024 and sell it today you would earn a total of  150.00  from holding Poznanska Korporacja Budowlana or generate 8.47% return on investment over 90 days.

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

LSI Software SA  vs.  Poznanska Korporacja Budowlana

LSI Software SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LSI Software SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, LSI Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Poznanska Korporacja

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Poznanska Korporacja Budowlana are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Poznanska Korporacja may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LSI Software and Poznanska Korporacja

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

The idea behind LSI Software SA and Poznanska Korporacja Budowlana 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.