Correlation Between PMPG Polskie and Carlson Investments

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

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

Diversification Opportunities for PMPG Polskie and Carlson Investments

0.51

Correlation Coefficient

PMPG Polskie  Carlson Investments

Very weak diversification

The 3 months correlation between PMPG and Carlson is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and PMPG Polskie 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 PMPG Polskie Media are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Carlson Investments go up and down completely randomly.

Pair Corralation between PMPG Polskie and Carlson Investments

Assuming the 90 days trading horizon PMPG Polskie is expected to generate 1.1 times less return on investment than Carlson Investments. But when comparing it to its historical volatility, PMPG Polskie Media is 1.07 times less risky than Carlson Investments. It trades about 0.12 of its potential returns per unit of risk. Carlson Investments SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  352.00  in Carlson Investments SA on October 26, 2024 and sell it today you would earn a total of  13.00  from holding Carlson Investments SA or generate 3.69% return on investment over 90 days.

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

PMPG Polskie Media  vs.  Carlson Investments SA

PMPG Polskie Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PMPG Polskie Media 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Carlson Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlson Investments SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with PMPG Polskie and Carlson Investments

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

The idea behind PMPG Polskie Media and Carlson Investments 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.