Correlation Between KGHM Polska and ECC Games

Can any of the company-specific risk be diversified away by investing in both KGHM Polska and ECC Games 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 ECC Games 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 ECC Games SA, you can compare the effects of market volatilities on KGHM Polska and ECC Games 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 ECC Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and ECC Games.

Diversification Opportunities for KGHM Polska and ECC Games

-0.56

Correlation Coefficient

KGHM Polska  ECC Games

Excellent diversification

The 3 months correlation between KGHM and ECC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and ECC Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECC Games 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 ECC Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECC Games SA has no effect on the direction of KGHM Polska i.e., KGHM Polska and ECC Games go up and down completely randomly.

Pair Corralation between KGHM Polska and ECC Games

Assuming the 90 days trading horizon KGHM Polska Miedz is expected to generate 0.44 times more return on investment than ECC Games. However, KGHM Polska Miedz is 2.29 times less risky than ECC Games. It trades about 0.09 of its potential returns per unit of risk. ECC Games SA is currently generating about -0.08 per unit of risk. If you would invest  12,560  in KGHM Polska Miedz on April 24, 2025 and sell it today you would earn a total of  1,215  from holding KGHM Polska Miedz or generate 9.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

KGHM Polska Miedz  vs.  ECC Games 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 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, KGHM Polska may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ECC Games SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days ECC Games 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 August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with KGHM Polska and ECC Games

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

The idea behind KGHM Polska Miedz and ECC Games 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.