Correlation Between SOFTWARE MANSION and Powszechna Kasa

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

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

Diversification Opportunities for SOFTWARE MANSION and Powszechna Kasa

-0.45

Correlation Coefficient

SOFTWARE MANSION  Powszechna Kasa

Very good diversification

The 3 months correlation between SOFTWARE and Powszechna is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION i.e., SOFTWARE MANSION and Powszechna Kasa go up and down completely randomly.

Pair Corralation between SOFTWARE MANSION and Powszechna Kasa

Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to under-perform the Powszechna Kasa. In addition to that, SOFTWARE MANSION is 1.27 times more volatile than Powszechna Kasa Oszczednosci. It trades about -0.06 of its total potential returns per unit of risk. Powszechna Kasa Oszczednosci is currently generating about 0.17 per unit of volatility. If you would invest  5,544  in Powszechna Kasa Oszczednosci on October 26, 2024 and sell it today you would earn a total of  944.00  from holding Powszechna Kasa Oszczednosci or generate 17.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

SOFTWARE MANSION SPOLKA  vs.  Powszechna Kasa Oszczednosci

SOFTWARE MANSION SPOLKA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOFTWARE MANSION SPOLKA 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.

Powszechna Kasa Oszc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechna Kasa reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOFTWARE MANSION and Powszechna Kasa

The main advantage of trading using opposite SOFTWARE MANSION and Powszechna Kasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.