Correlation Between Stalprodukt and Poznanska Korporacja

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

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

Diversification Opportunities for Stalprodukt and Poznanska Korporacja

0.59

Correlation Coefficient

Stalprodukt  Poznanska Korporacja

Very weak diversification

The 3 months correlation between Stalprodukt and Poznanska is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stalprodukt SA and Poznanska Korporacja Budowlana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poznanska Korporacja and Stalprodukt 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 Stalprodukt SA are associated (or correlated) with Poznanska Korporacja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poznanska Korporacja has no effect on the direction of Stalprodukt i.e., Stalprodukt and Poznanska Korporacja go up and down completely randomly.

Pair Corralation between Stalprodukt and Poznanska Korporacja

Assuming the 90 days trading horizon Stalprodukt SA is expected to generate 0.48 times more return on investment than Poznanska Korporacja. However, Stalprodukt SA is 2.07 times less risky than Poznanska Korporacja. It trades about -0.03 of its potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about -0.09 per unit of risk. If you would invest  22,900  in Stalprodukt SA on October 22, 2024 and sell it today you would lose (500.00) from holding Stalprodukt SA or give up 2.18% of portfolio value over 90 days.

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

Stalprodukt SA  vs.  Poznanska Korporacja Budowlana

Stalprodukt SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stalprodukt SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Stalprodukt is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Poznanska Korporacja

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poznanska Korporacja Budowlana has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Stalprodukt and Poznanska Korporacja

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

The idea behind Stalprodukt SA and Poznanska Korporacja Budowlana 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.