Correlation Between Powszechny Zaklad and Enea SA

Can any of the company-specific risk be diversified away by investing in both Powszechny Zaklad and Enea SA 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 Powszechny Zaklad and Enea SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Powszechny Zaklad Ubezpieczen and Enea SA, you can compare the effects of market volatilities on Powszechny Zaklad and Enea SA 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 Powszechny Zaklad with a short position of Enea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powszechny Zaklad and Enea SA.

Diversification Opportunities for Powszechny Zaklad and Enea SA

0.87

Correlation Coefficient

Powszechny Zaklad  Enea SA

Very poor diversification

The 3 months correlation between Powszechny and Enea is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Powszechny Zaklad Ubezpieczen and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea SA and Powszechny Zaklad 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 Powszechny Zaklad Ubezpieczen are associated (or correlated) with Enea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea SA has no effect on the direction of Powszechny Zaklad i.e., Powszechny Zaklad and Enea SA go up and down completely randomly.

Pair Corralation between Powszechny Zaklad and Enea SA

Assuming the 90 days trading horizon Powszechny Zaklad Ubezpieczen is expected to generate 0.64 times more return on investment than Enea SA. However, Powszechny Zaklad Ubezpieczen is 1.57 times less risky than Enea SA. It trades about 0.54 of its potential returns per unit of risk. Enea SA is currently generating about 0.16 per unit of risk. If you would invest  4,603  in Powszechny Zaklad Ubezpieczen on October 27, 2024 and sell it today you would earn a total of  447.00  from holding Powszechny Zaklad Ubezpieczen or generate 9.71% return on investment over 90 days.

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

Powszechny Zaklad Ubezpieczen  vs.  Enea SA

Powszechny Zaklad

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechny Zaklad Ubezpieczen are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechny Zaklad reported solid returns over the last few months and may actually be approaching a breakup point.

Enea SA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enea SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enea SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Powszechny Zaklad and Enea SA

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

The idea behind Powszechny Zaklad Ubezpieczen and Enea 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.