Correlation Between KGHM Polska and Carmat SA

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

Diversification Opportunities for KGHM Polska and Carmat SA

-0.62

Correlation Coefficient

KGHM Polska  Carmat SA

Excellent diversification

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

Pair Corralation between KGHM Polska and Carmat SA

Assuming the 90 days trading horizon KGHM Polska Miedz is expected to generate 0.15 times more return on investment than Carmat SA. However, KGHM Polska Miedz is 6.71 times less risky than Carmat SA. It trades about 0.11 of its potential returns per unit of risk. Carmat SA is currently generating about -0.03 per unit of risk. If you would invest  2,695  in KGHM Polska Miedz on April 20, 2025 and sell it today you would earn a total of  421.00  from holding KGHM Polska Miedz or generate 15.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

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

Carmat SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carmat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with KGHM Polska and Carmat SA

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

The idea behind KGHM Polska Miedz and Carmat 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.