Correlation Between Powszechny Zaklad and X Trade

Can any of the company-specific risk be diversified away by investing in both Powszechny Zaklad and X Trade 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 X Trade 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 X Trade Brokers, you can compare the effects of market volatilities on Powszechny Zaklad and X Trade 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 X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powszechny Zaklad and X Trade.

Diversification Opportunities for Powszechny Zaklad and X Trade

0.55

Correlation Coefficient

Powszechny Zaklad  X Trade

Very weak diversification

The 3 months correlation between Powszechny and XTB is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Powszechny Zaklad Ubezpieczen and X Trade Brokers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Trade Brokers 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 X Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Trade Brokers has no effect on the direction of Powszechny Zaklad i.e., Powszechny Zaklad and X Trade go up and down completely randomly.

Pair Corralation between Powszechny Zaklad and X Trade

Assuming the 90 days trading horizon Powszechny Zaklad is expected to generate 2.41 times less return on investment than X Trade. But when comparing it to its historical volatility, Powszechny Zaklad Ubezpieczen is 1.38 times less risky than X Trade. It trades about 0.05 of its potential returns per unit of risk. X Trade Brokers is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,681  in X Trade Brokers on September 28, 2024 and sell it today you would earn a total of  4,273  from holding X Trade Brokers or generate 159.38% return on investment over 90 days.

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

Powszechny Zaklad Ubezpieczen  vs.  X Trade Brokers

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.

X Trade Brokers

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in X Trade Brokers are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, X Trade reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Powszechny Zaklad and X Trade

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

The idea behind Powszechny Zaklad Ubezpieczen and X Trade Brokers 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.