Correlation Between Powszechny Zaklad and X Trade
Can any of the company-specific risk be diversified away by investing in both Powszechny Zaklad and X Trade 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 X Trade 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 X Trade Brokers, you can compare the effects of market volatilities on Powszechny Zaklad and X Trade 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 X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powszechny Zaklad and X Trade.
Diversification Opportunities for Powszechny Zaklad and X Trade
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Powszechny and XTB is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Powszechny Zaklad Ubezpieczen and X Trade Brokers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Trade Brokers 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 X Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Trade Brokers has no effect on the direction of Powszechny Zaklad i.e., Powszechny Zaklad and X Trade go up and down completely randomly.
Pair Corralation between Powszechny Zaklad and X Trade
Assuming the 90 days trading horizon Powszechny Zaklad is expected to generate 1.25 times less return on investment than X Trade. But when comparing it to its historical volatility, Powszechny Zaklad Ubezpieczen is 1.16 times less risky than X Trade. It trades about 0.16 of its potential returns per unit of risk. X Trade Brokers is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,304 in X Trade Brokers on October 15, 2024 and sell it today you would earn a total of 1,256 from holding X Trade Brokers or generate 19.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Powszechny Zaklad Ubezpieczen vs. X Trade Brokers
Performance |
Timeline |
Powszechny Zaklad |
X Trade Brokers |
Powszechny Zaklad and X Trade Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Powszechny Zaklad and X Trade
The main advantage of trading using opposite Powszechny Zaklad and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powszechny Zaklad position performs unexpectedly, X Trade 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 X Trade will offset losses from the drop in X Trade's long position.Powszechny Zaklad vs. PZ Cormay SA | ||
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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