Correlation Between Kogeneracja and New Tech

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

By analyzing existing cross correlation between Kogeneracja SA and New Tech Venture, you can compare the effects of market volatilities on Kogeneracja and New Tech 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 Kogeneracja with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kogeneracja and New Tech.

Diversification Opportunities for Kogeneracja and New Tech

0.4

Correlation Coefficient

Kogeneracja  New Tech

Very weak diversification

The 3 months correlation between Kogeneracja and New is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kogeneracja SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture and Kogeneracja 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 Kogeneracja SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of Kogeneracja i.e., Kogeneracja and New Tech go up and down completely randomly.

Pair Corralation between Kogeneracja and New Tech

Assuming the 90 days trading horizon Kogeneracja SA is expected to generate 0.47 times more return on investment than New Tech. However, Kogeneracja SA is 2.13 times less risky than New Tech. It trades about 0.07 of its potential returns per unit of risk. New Tech Venture is currently generating about 0.03 per unit of risk. If you would invest  4,555  in Kogeneracja SA on September 5, 2024 and sell it today you would earn a total of  625.00  from holding Kogeneracja SA or generate 13.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.48%
Values	Daily Returns

Kogeneracja SA  vs.  New Tech Venture

Kogeneracja SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

New Tech Venture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Tech Venture 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 Kogeneracja and New Tech

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

The idea behind Kogeneracja SA and New Tech Venture 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.