Correlation Between PSB Holdings and Powszechna Kasa

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

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

Diversification Opportunities for PSB Holdings and Powszechna Kasa

-0.08

Correlation Coefficient

PSB Holdings  Powszechna Kasa

Good diversification

The 3 months correlation between PSB and Powszechna is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PSB Holdings and Powszechna Kasa Oszczednosci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechna Kasa Oszc and PSB Holdings 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 PSB Holdings are associated (or correlated) with Powszechna Kasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechna Kasa Oszc has no effect on the direction of PSB Holdings i.e., PSB Holdings and Powszechna Kasa go up and down completely randomly.

Pair Corralation between PSB Holdings and Powszechna Kasa

Given the investment horizon of 90 days PSB Holdings is expected to generate 81.05 times less return on investment than Powszechna Kasa. But when comparing it to its historical volatility, PSB Holdings is 6.7 times less risky than Powszechna Kasa. It trades about 0.01 of its potential returns per unit of risk. Powszechna Kasa Oszczednosci is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,457  in Powszechna Kasa Oszczednosci on December 21, 2024 and sell it today you would earn a total of  564.00  from holding Powszechna Kasa Oszczednosci or generate 38.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

PSB Holdings  vs.  Powszechna Kasa Oszczednosci

PSB Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PSB Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, PSB Holdings is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Powszechna Kasa Oszc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Powszechna Kasa showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PSB Holdings and Powszechna Kasa

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

The idea behind PSB Holdings and Powszechna Kasa Oszczednosci 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.