Correlation Between Powszechny Zaklad and Carlson Investments

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

By analyzing existing cross correlation between Powszechny Zaklad Ubezpieczen and Carlson Investments SA, you can compare the effects of market volatilities on Powszechny Zaklad and Carlson Investments 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 Powszechny Zaklad with a short position of Carlson Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powszechny Zaklad and Carlson Investments.

Diversification Opportunities for Powszechny Zaklad and Carlson Investments

-0.27

Correlation Coefficient

Powszechny Zaklad  Carlson Investments

Very good diversification

The 3 months correlation between Powszechny and Carlson is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Powszechny Zaklad Ubezpieczen and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and Powszechny Zaklad 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 Powszechny Zaklad Ubezpieczen are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Powszechny Zaklad i.e., Powszechny Zaklad and Carlson Investments go up and down completely randomly.

Pair Corralation between Powszechny Zaklad and Carlson Investments

Assuming the 90 days trading horizon Powszechny Zaklad Ubezpieczen is expected to generate 0.42 times more return on investment than Carlson Investments. However, Powszechny Zaklad Ubezpieczen is 2.37 times less risky than Carlson Investments. It trades about 0.1 of its potential returns per unit of risk. Carlson Investments SA is currently generating about -0.14 per unit of risk. If you would invest  4,208  in Powszechny Zaklad Ubezpieczen on September 30, 2024 and sell it today you would earn a total of  395.00  from holding Powszechny Zaklad Ubezpieczen or generate 9.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Powszechny Zaklad Ubezpieczen  vs.  Carlson Investments SA

Powszechny Zaklad

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechny Zaklad Ubezpieczen are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechny Zaklad may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Carlson Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlson Investments 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 Powszechny Zaklad and Carlson Investments

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

The idea behind Powszechny Zaklad Ubezpieczen and Carlson Investments 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.