Correlation Between Drago Entertainment and Intersport Polska

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

By analyzing existing cross correlation between Drago entertainment SA and Intersport Polska SA, you can compare the effects of market volatilities on Drago Entertainment and Intersport Polska 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 Drago Entertainment with a short position of Intersport Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Drago Entertainment and Intersport Polska.

Diversification Opportunities for Drago Entertainment and Intersport Polska

0.16

Correlation Coefficient

Drago Entertainment  Intersport Polska

Average diversification

The 3 months correlation between Drago and Intersport is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Drago entertainment SA and Intersport Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intersport Polska and Drago Entertainment 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 Drago entertainment SA are associated (or correlated) with Intersport Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intersport Polska has no effect on the direction of Drago Entertainment i.e., Drago Entertainment and Intersport Polska go up and down completely randomly.

Pair Corralation between Drago Entertainment and Intersport Polska

Assuming the 90 days trading horizon Drago entertainment SA is expected to generate 0.37 times more return on investment than Intersport Polska. However, Drago entertainment SA is 2.72 times less risky than Intersport Polska. It trades about -0.22 of its potential returns per unit of risk. Intersport Polska SA is currently generating about -0.18 per unit of risk. If you would invest  2,130  in Drago entertainment SA on September 27, 2024 and sell it today you would lose (250.00) from holding Drago entertainment SA or give up 11.74% of portfolio value over 90 days.

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

Drago entertainment SA  vs.  Intersport Polska SA

Drago entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Drago entertainment SA 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.

Intersport Polska

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intersport Polska 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.

Pair Trading with Drago Entertainment and Intersport Polska

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

The idea behind Drago entertainment SA and Intersport Polska SA 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .