Correlation Between Bank Polska and Astarta Holding

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

By analyzing existing cross correlation between Bank Polska Kasa and Astarta Holding NV, you can compare the effects of market volatilities on Bank Polska and Astarta Holding 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 Bank Polska with a short position of Astarta Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and Astarta Holding.

Diversification Opportunities for Bank Polska and Astarta Holding

-0.37

Correlation Coefficient

Bank Polska  Astarta Holding

Very good diversification

The 3 months correlation between Bank and Astarta is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa and Astarta Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astarta Holding NV and Bank Polska 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 Bank Polska Kasa are associated (or correlated) with Astarta Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astarta Holding NV has no effect on the direction of Bank Polska i.e., Bank Polska and Astarta Holding go up and down completely randomly.

Pair Corralation between Bank Polska and Astarta Holding

Assuming the 90 days trading horizon Bank Polska Kasa is expected to under-perform the Astarta Holding. But the stock apears to be less risky and, when comparing its historical volatility, Bank Polska Kasa is 1.09 times less risky than Astarta Holding. The stock trades about -0.03 of its potential returns per unit of risk. The Astarta Holding NV is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,150  in Astarta Holding NV on September 30, 2024 and sell it today you would earn a total of  930.00  from holding Astarta Holding NV or generate 29.52% return on investment over 90 days.

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

Bank Polska Kasa  vs.  Astarta Holding NV

Bank Polska Kasa

Risk-Adjusted Performance

0 of 100

Very Weak

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

Astarta Holding NV

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Astarta Holding NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Astarta Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Polska and Astarta Holding

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

The idea behind Bank Polska Kasa and Astarta Holding NV 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.