Correlation Between Poznanska Korporacja and Esotiq Henderson

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

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

Diversification Opportunities for Poznanska Korporacja and Esotiq Henderson

-0.47

Correlation Coefficient

Poznanska Korporacja  Esotiq Henderson

Very good diversification

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

Pair Corralation between Poznanska Korporacja and Esotiq Henderson

Assuming the 90 days trading horizon Poznanska Korporacja Budowlana is expected to under-perform the Esotiq Henderson. But the stock apears to be less risky and, when comparing its historical volatility, Poznanska Korporacja Budowlana is 1.21 times less risky than Esotiq Henderson. The stock trades about -0.1 of its potential returns per unit of risk. The Esotiq Henderson SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,170  in Esotiq Henderson SA on September 3, 2024 and sell it today you would lose (150.00) from holding Esotiq Henderson SA or give up 3.6% of portfolio value over 90 days.

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

Poznanska Korporacja Budowlana  vs.  Esotiq Henderson SA

Poznanska Korporacja

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poznanska Korporacja Budowlana 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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Esotiq Henderson

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Poznanska Korporacja Budowlana and Esotiq Henderson 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.