Correlation Between Polski Koncern and ENEOS Holdings

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

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

Diversification Opportunities for Polski Koncern and ENEOS Holdings

0.22

Correlation Coefficient

Polski Koncern  ENEOS Holdings

Modest diversification

The 3 months correlation between Polski and ENEOS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS Holdings and Polski Koncern 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 Polski Koncern Naftowy are associated (or correlated) with ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Polski Koncern i.e., Polski Koncern and ENEOS Holdings go up and down completely randomly.

Pair Corralation between Polski Koncern and ENEOS Holdings

Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the ENEOS Holdings. In addition to that, Polski Koncern is 1.12 times more volatile than ENEOS Holdings. It trades about -0.14 of its total potential returns per unit of risk. ENEOS Holdings is currently generating about 0.01 per unit of volatility. If you would invest  482.00  in ENEOS Holdings on September 24, 2024 and sell it today you would earn a total of  0.00  from holding ENEOS Holdings or generate 0.0% return on investment over 90 days.

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

Polski Koncern Naftowy  vs.  ENEOS Holdings

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ENEOS Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENEOS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ENEOS Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Polski Koncern and ENEOS Holdings

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

The idea behind Polski Koncern Naftowy and ENEOS Holdings 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.