Correlation Between KGHM Polska and CENTRICA ADR
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and CENTRICA ADR 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 CENTRICA ADR 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 CENTRICA ADR NEW, you can compare the effects of market volatilities on KGHM Polska and CENTRICA ADR 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 CENTRICA ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and CENTRICA ADR.
Diversification Opportunities for KGHM Polska and CENTRICA ADR
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between KGHM and CENTRICA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and CENTRICA ADR NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRICA ADR NEW 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 CENTRICA ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRICA ADR NEW has no effect on the direction of KGHM Polska i.e., KGHM Polska and CENTRICA ADR go up and down completely randomly.
Pair Corralation between KGHM Polska and CENTRICA ADR
Assuming the 90 days trading horizon KGHM Polska Miedz is expected to generate 1.28 times more return on investment than CENTRICA ADR. However, KGHM Polska is 1.28 times more volatile than CENTRICA ADR NEW. It trades about 0.06 of its potential returns per unit of risk. CENTRICA ADR NEW is currently generating about 0.01 per unit of risk. If you would invest 2,830 in KGHM Polska Miedz on April 23, 2025 and sell it today you would earn a total of 227.00 from holding KGHM Polska Miedz or generate 8.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KGHM Polska Miedz vs. CENTRICA ADR NEW
Performance |
Timeline |
KGHM Polska Miedz |
CENTRICA ADR NEW |
KGHM Polska and CENTRICA ADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KGHM Polska and CENTRICA ADR
The main advantage of trading using opposite KGHM Polska and CENTRICA ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, CENTRICA ADR 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 CENTRICA ADR will offset losses from the drop in CENTRICA ADR's long position.KGHM Polska vs. Tsingtao Brewery | KGHM Polska vs. United Breweries Co | KGHM Polska vs. STORE ELECTRONIC | KGHM Polska vs. STMICROELECTRONICS |
CENTRICA ADR vs. CN YANGTPWR GDR | CENTRICA ADR vs. SIEMENS ENERGY AG | CENTRICA ADR vs. Siemens Energy AG | CENTRICA ADR vs. Vistra Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |