Correlation Between KGHM Polska and CryoLife

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

Diversification Opportunities for KGHM Polska and CryoLife

0.48

Correlation Coefficient

KGHM Polska  CryoLife

Very weak diversification

The 3 months correlation between KGHM and CryoLife is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of KGHM Polska i.e., KGHM Polska and CryoLife go up and down completely randomly.

Pair Corralation between KGHM Polska and CryoLife

Assuming the 90 days trading horizon KGHM Polska is expected to generate 2.27 times less return on investment than CryoLife. But when comparing it to its historical volatility, KGHM Polska Miedz is 1.06 times less risky than CryoLife. It trades about 0.1 of its potential returns per unit of risk. CryoLife is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,944  in CryoLife on April 22, 2025 and sell it today you would earn a total of  696.00  from holding CryoLife or generate 35.8% return on investment over 90 days.

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

KGHM Polska Miedz  vs.  CryoLife

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.

CryoLife

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CryoLife are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CryoLife reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KGHM Polska and CryoLife

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

The idea behind KGHM Polska Miedz and CryoLife 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.