Correlation Between Creotech Instruments and Polski Koncern

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

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

Diversification Opportunities for Creotech Instruments and Polski Koncern

0.33

Correlation Coefficient

Creotech Instruments  Polski Koncern

Weak diversification

The 3 months correlation between Creotech and Polski is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA 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 Creotech Instruments 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 Creotech Instruments SA 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 Creotech Instruments i.e., Creotech Instruments and Polski Koncern go up and down completely randomly.

Pair Corralation between Creotech Instruments and Polski Koncern

Assuming the 90 days trading horizon Creotech Instruments SA is expected to under-perform the Polski Koncern. In addition to that, Creotech Instruments is 1.62 times more volatile than Polski Koncern Naftowy. It trades about -0.11 of its total potential returns per unit of risk. Polski Koncern Naftowy is currently generating about -0.13 per unit of volatility. If you would invest  5,711  in Polski Koncern Naftowy on September 17, 2024 and sell it today you would lose (791.00) from holding Polski Koncern Naftowy or give up 13.85% of portfolio value over 90 days.

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

Creotech Instruments SA  vs.  Polski Koncern Naftowy

Creotech Instruments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creotech Instruments SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise 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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Creotech Instruments and Polski Koncern

The main advantage of trading using opposite Creotech Instruments and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creotech Instruments 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 Creotech Instruments SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.