Correlation Between X Trade and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both X Trade and KGHM Polska 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 X Trade and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Trade Brokers and KGHM Polska Miedz, you can compare the effects of market volatilities on X Trade and KGHM Polska 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 X Trade with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and KGHM Polska.
Diversification Opportunities for X Trade and KGHM Polska
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XTB and KGHM is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz and X Trade 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 X Trade Brokers are associated (or correlated) with KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of X Trade i.e., X Trade and KGHM Polska go up and down completely randomly.
Pair Corralation between X Trade and KGHM Polska
Assuming the 90 days trading horizon X Trade Brokers is expected to generate 1.05 times more return on investment than KGHM Polska. However, X Trade is 1.05 times more volatile than KGHM Polska Miedz. It trades about 0.1 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.0 per unit of risk. If you would invest 2,606 in X Trade Brokers on September 26, 2024 and sell it today you would earn a total of 4,348 from holding X Trade Brokers or generate 166.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
X Trade Brokers vs. KGHM Polska Miedz
Performance |
Timeline |
X Trade Brokers |
KGHM Polska Miedz |
X Trade and KGHM Polska Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with X Trade and KGHM Polska
The main advantage of trading using opposite X Trade and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.The idea behind X Trade Brokers and KGHM Polska Miedz 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.KGHM Polska vs. Biztech Konsulting SA | KGHM Polska vs. Powszechny Zaklad Ubezpieczen | KGHM Polska vs. X Trade Brokers | KGHM Polska vs. Centrum Finansowe Banku |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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