Correlation Between PMPG Polskie and Jastrzebska Spotka

Can any of the company-specific risk be diversified away by investing in both PMPG Polskie and Jastrzebska Spotka 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 Jastrzebska Spotka 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 Jastrzebska Spotka Weglowa, you can compare the effects of market volatilities on PMPG Polskie and Jastrzebska Spotka 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 Jastrzebska Spotka. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMPG Polskie and Jastrzebska Spotka.

Diversification Opportunities for PMPG Polskie and Jastrzebska Spotka

-0.32

Correlation Coefficient

PMPG Polskie  Jastrzebska Spotka

Very good diversification

The 3 months correlation between PMPG and Jastrzebska is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PMPG Polskie Media and Jastrzebska Spotka Weglowa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jastrzebska Spotka 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 Jastrzebska Spotka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jastrzebska Spotka has no effect on the direction of PMPG Polskie i.e., PMPG Polskie and Jastrzebska Spotka go up and down completely randomly.

Pair Corralation between PMPG Polskie and Jastrzebska Spotka

Assuming the 90 days trading horizon PMPG Polskie is expected to generate 2.62 times less return on investment than Jastrzebska Spotka. But when comparing it to its historical volatility, PMPG Polskie Media is 1.04 times less risky than Jastrzebska Spotka. It trades about 0.06 of its potential returns per unit of risk. Jastrzebska Spotka Weglowa is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,049  in Jastrzebska Spotka Weglowa on December 24, 2024 and sell it today you would earn a total of  573.00  from holding Jastrzebska Spotka Weglowa or generate 27.96% return on investment over 90 days.

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

PMPG Polskie Media  vs.  Jastrzebska Spotka Weglowa

PMPG Polskie Media

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PMPG Polskie Media are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, PMPG Polskie may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Jastrzebska Spotka

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jastrzebska Spotka Weglowa are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Jastrzebska Spotka reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PMPG Polskie and Jastrzebska Spotka

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

The idea behind PMPG Polskie Media and Jastrzebska Spotka Weglowa 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.