Correlation Between UF Games and Bank Handlowy

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

By analyzing existing cross correlation between UF Games SA and Bank Handlowy w, you can compare the effects of market volatilities on UF Games and Bank Handlowy 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 UF Games with a short position of Bank Handlowy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and Bank Handlowy.

Diversification Opportunities for UF Games and Bank Handlowy

-0.07

Correlation Coefficient

UF Games  Bank Handlowy

Good diversification

The 3 months correlation between UFG and Bank is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and Bank Handlowy w in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Handlowy w and UF Games 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 UF Games SA are associated (or correlated) with Bank Handlowy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Handlowy w has no effect on the direction of UF Games i.e., UF Games and Bank Handlowy go up and down completely randomly.

Pair Corralation between UF Games and Bank Handlowy

Assuming the 90 days trading horizon UF Games SA is expected to under-perform the Bank Handlowy. In addition to that, UF Games is 2.07 times more volatile than Bank Handlowy w. It trades about -0.05 of its total potential returns per unit of risk. Bank Handlowy w is currently generating about 0.08 per unit of volatility. If you would invest  6,274  in Bank Handlowy w on December 4, 2024 and sell it today you would earn a total of  4,586  from holding Bank Handlowy w or generate 73.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.35%
Values	Daily Returns

UF Games SA  vs.  Bank Handlowy w

UF Games SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UF Games SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, UF Games reported solid returns over the last few months and may actually be approaching a breakup point.

Bank Handlowy w

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Handlowy w are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank Handlowy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UF Games and Bank Handlowy

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

The idea behind UF Games SA and Bank Handlowy w 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.