Correlation Between KGHM Polska and CCC SA

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

By analyzing existing cross correlation between KGHM Polska Miedz and CCC SA, you can compare the effects of market volatilities on KGHM Polska and CCC SA 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 KGHM Polska with a short position of CCC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and CCC SA.

Diversification Opportunities for KGHM Polska and CCC SA

-0.42

Correlation Coefficient

KGHM Polska  CCC SA

Very good diversification

The 3 months correlation between KGHM and CCC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC SA and KGHM 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 KGHM Polska Miedz are associated (or correlated) with CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of KGHM Polska i.e., KGHM Polska and CCC SA go up and down completely randomly.

Pair Corralation between KGHM Polska and CCC SA

Assuming the 90 days trading horizon KGHM Polska Miedz is expected to generate 0.66 times more return on investment than CCC SA. However, KGHM Polska Miedz is 1.52 times less risky than CCC SA. It trades about 0.11 of its potential returns per unit of risk. CCC SA is currently generating about -0.02 per unit of risk. If you would invest  11,695  in KGHM Polska Miedz on April 22, 2025 and sell it today you would earn a total of  1,485  from holding KGHM Polska Miedz or generate 12.7% return on investment over 90 days.

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

KGHM Polska Miedz  vs.  CCC SA

KGHM Polska Miedz

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KGHM Polska Miedz are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, KGHM Polska reported solid returns over the last few months and may actually be approaching a breakup point.

CCC SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with KGHM Polska and CCC SA

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

The idea behind KGHM Polska Miedz and CCC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.