Correlation Between TEN SQUARE and Polski Koncern

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

By analyzing existing cross correlation between TEN SQUARE GAMES and Polski Koncern Naftowy, you can compare the effects of market volatilities on TEN SQUARE and Polski Koncern 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 TEN SQUARE with a short position of Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEN SQUARE and Polski Koncern.

Diversification Opportunities for TEN SQUARE and Polski Koncern

0.72

Correlation Coefficient

TEN SQUARE  Polski Koncern

Poor diversification

The 3 months correlation between TEN and Polski is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TEN SQUARE GAMES and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy and TEN SQUARE 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 TEN SQUARE GAMES are associated (or correlated) with Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of TEN SQUARE i.e., TEN SQUARE and Polski Koncern go up and down completely randomly.

Pair Corralation between TEN SQUARE and Polski Koncern

Assuming the 90 days trading horizon TEN SQUARE GAMES is expected to under-perform the Polski Koncern. In addition to that, TEN SQUARE is 1.2 times more volatile than Polski Koncern Naftowy. It trades about -0.04 of its total potential returns per unit of risk. Polski Koncern Naftowy is currently generating about -0.01 per unit of volatility. If you would invest  5,382  in Polski Koncern Naftowy on October 25, 2024 and sell it today you would lose (102.00) from holding Polski Koncern Naftowy or give up 1.9% of portfolio value over 90 days.

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

TEN SQUARE GAMES  vs.  Polski Koncern Naftowy

TEN SQUARE GAMES

Risk-Adjusted Performance

0 of 100

Very Weak

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

Polski Koncern Naftowy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TEN SQUARE and Polski Koncern

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

The idea behind TEN SQUARE GAMES and Polski Koncern Naftowy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.