Correlation Between Movie Games and Bank Handlowy

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

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

Diversification Opportunities for Movie Games and Bank Handlowy

0.54

Correlation Coefficient

Movie Games  Bank Handlowy

Very weak diversification

The 3 months correlation between Movie and Bank is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and Bank Handlowy w in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Handlowy w and Movie Games 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 Movie Games SA are associated (or correlated) with Bank Handlowy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Handlowy w has no effect on the direction of Movie Games i.e., Movie Games and Bank Handlowy go up and down completely randomly.

Pair Corralation between Movie Games and Bank Handlowy

Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the Bank Handlowy. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 1.22 times less risky than Bank Handlowy. The stock trades about -0.3 of its potential returns per unit of risk. The Bank Handlowy w is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  9,800  in Bank Handlowy w on December 2, 2024 and sell it today you would earn a total of  1,100  from holding Bank Handlowy w or generate 11.22% return on investment over 90 days.

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

Movie Games SA  vs.  Bank Handlowy w

Movie Games SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Movie Games SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Movie Games may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bank Handlowy w

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Handlowy w are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank Handlowy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Movie Games and Bank Handlowy

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

The idea behind Movie Games SA and Bank Handlowy w 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.