Correlation Between Polski Koncern and PKSHA TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both Polski Koncern and PKSHA TECHNOLOGY 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 Polski Koncern and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polski Koncern Naftowy and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on Polski Koncern and PKSHA TECHNOLOGY 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 Polski Koncern with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and PKSHA TECHNOLOGY.

Diversification Opportunities for Polski Koncern and PKSHA TECHNOLOGY

-0.48

Correlation Coefficient

Polski Koncern  PKSHA TECHNOLOGY

Very good diversification

The 3 months correlation between Polski and PKSHA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC and Polski Koncern 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 Polski Koncern Naftowy are associated (or correlated) with PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of Polski Koncern i.e., Polski Koncern and PKSHA TECHNOLOGY go up and down completely randomly.

Pair Corralation between Polski Koncern and PKSHA TECHNOLOGY

Assuming the 90 days trading horizon Polski Koncern is expected to generate 1.91 times less return on investment than PKSHA TECHNOLOGY. But when comparing it to its historical volatility, Polski Koncern Naftowy is 1.47 times less risky than PKSHA TECHNOLOGY. It trades about 0.03 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,950  in PKSHA TECHNOLOGY INC on October 5, 2024 and sell it today you would earn a total of  370.00  from holding PKSHA TECHNOLOGY INC or generate 18.97% return on investment over 90 days.

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

Polski Koncern Naftowy  vs.  PKSHA TECHNOLOGY INC

Polski Koncern Naftowy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polski Koncern Naftowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days PKSHA TECHNOLOGY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, PKSHA TECHNOLOGY reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Polski Koncern and PKSHA TECHNOLOGY

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

The idea behind Polski Koncern Naftowy and PKSHA TECHNOLOGY INC 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.