Correlation Between KGHM Polska and Vicinity Centres

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

Diversification Opportunities for KGHM Polska and Vicinity Centres

0.62

Correlation Coefficient

KGHM Polska  Vicinity Centres

Poor diversification

The 3 months correlation between KGHM and Vicinity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Vicinity Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres 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 Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of KGHM Polska i.e., KGHM Polska and Vicinity Centres go up and down completely randomly.

Pair Corralation between KGHM Polska and Vicinity Centres

Assuming the 90 days trading horizon KGHM Polska Miedz is expected to generate 1.72 times more return on investment than Vicinity Centres. However, KGHM Polska is 1.72 times more volatile than Vicinity Centres. It trades about 0.1 of its potential returns per unit of risk. Vicinity Centres is currently generating about 0.13 per unit of risk. If you would invest  2,695  in KGHM Polska Miedz on April 21, 2025 and sell it today you would earn a total of  362.00  from holding KGHM Polska Miedz or generate 13.43% return on investment over 90 days.

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

KGHM Polska Miedz  vs.  Vicinity Centres

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. Despite nearly fragile technical indicators, KGHM Polska reported solid returns over the last few months and may actually be approaching a breakup point.

Vicinity Centres

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vicinity Centres are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vicinity Centres may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KGHM Polska and Vicinity Centres

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

The idea behind KGHM Polska Miedz and Vicinity Centres 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..