Correlation Between Bank Polska and Mo Bruk

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

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

Diversification Opportunities for Bank Polska and Mo Bruk

-0.37

Correlation Coefficient

Bank Polska  Mo Bruk

Very good diversification

The 3 months correlation between Bank and MBR is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and Mo Bruk SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mo Bruk SA and Bank Polska 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 Bank Polska Kasa are associated (or correlated) with Mo Bruk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mo Bruk SA has no effect on the direction of Bank Polska i.e., Bank Polska and Mo Bruk go up and down completely randomly.

Pair Corralation between Bank Polska and Mo Bruk

Assuming the 90 days trading horizon Bank Polska Kasa is expected to under-perform the Mo Bruk. But the stock apears to be less risky and, when comparing its historical volatility, Bank Polska Kasa is 1.13 times less risky than Mo Bruk. The stock trades about -0.04 of its potential returns per unit of risk. The Mo Bruk SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  30,650  in Mo Bruk SA on October 11, 2024 and sell it today you would earn a total of  3,850  from holding Mo Bruk SA or generate 12.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Bank Polska Kasa  vs.  Mo Bruk SA

Bank Polska Kasa

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mo Bruk SA

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mo Bruk SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mo Bruk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Polska and Mo Bruk

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

The idea behind Bank Polska Kasa and Mo Bruk 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.