Correlation Between KGHM Polska and TRAVEL +

Can any of the company-specific risk be diversified away by investing in both KGHM Polska and TRAVEL + 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 TRAVEL + 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 TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on KGHM Polska and TRAVEL + 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 TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and TRAVEL +.

Diversification Opportunities for KGHM Polska and TRAVEL +

0.54

Correlation Coefficient

KGHM Polska  TRAVEL +

Very weak diversification

The 3 months correlation between KGHM and TRAVEL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL 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 TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of KGHM Polska i.e., KGHM Polska and TRAVEL + go up and down completely randomly.

Pair Corralation between KGHM Polska and TRAVEL +

Assuming the 90 days trading horizon KGHM Polska is expected to generate 1.53 times less return on investment than TRAVEL +. In addition to that, KGHM Polska is 1.33 times more volatile than TRAVEL LEISURE DL 01. It trades about 0.07 of its total potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.14 per unit of volatility. If you would invest  4,509  in TRAVEL LEISURE DL 01 on April 14, 2025 and sell it today you would earn a total of  431.00  from holding TRAVEL LEISURE DL 01 or generate 9.56% 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.  TRAVEL LEISURE DL 01

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.

TRAVEL LEISURE DL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KGHM Polska and TRAVEL +

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

The idea behind KGHM Polska Miedz and TRAVEL LEISURE DL 01 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.