Correlation Between Powszechna Kasa and Gaming Factory

Can any of the company-specific risk be diversified away by investing in both Powszechna Kasa and Gaming Factory 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 Powszechna Kasa and Gaming Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Powszechna Kasa and Gaming Factory

0.25

Correlation Coefficient

Powszechna Kasa  Gaming Factory

Modest diversification

The 3 months correlation between Powszechna and Gaming is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Powszechna Kasa Oszczednosci and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory SA and Powszechna Kasa 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 Powszechna Kasa Oszczednosci are associated (or correlated) with Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of Powszechna Kasa i.e., Powszechna Kasa and Gaming Factory go up and down completely randomly.

Pair Corralation between Powszechna Kasa and Gaming Factory

Assuming the 90 days trading horizon Powszechna Kasa is expected to generate 1.48 times less return on investment than Gaming Factory. But when comparing it to its historical volatility, Powszechna Kasa Oszczednosci is 1.93 times less risky than Gaming Factory. It trades about 0.23 of its potential returns per unit of risk. Gaming Factory SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  700.00  in Gaming Factory SA on December 25, 2024 and sell it today you would earn a total of  320.00  from holding Gaming Factory SA or generate 45.71% return on investment over 90 days.

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

Powszechna Kasa Oszczednosci  vs.  Gaming Factory SA

Powszechna Kasa Oszc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechna Kasa reported solid returns over the last few months and may actually be approaching a breakup point.

Gaming Factory SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Factory SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gaming Factory reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Powszechna Kasa and Gaming Factory

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

The idea behind Powszechna Kasa Oszczednosci and Gaming Factory 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.