Correlation Between Vercom SA and Beta MWIG40TR

Can any of the company-specific risk be diversified away by investing in both Vercom SA and Beta MWIG40TR 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 Vercom SA and Beta MWIG40TR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vercom SA and Beta mWIG40TR Portfelowy, you can compare the effects of market volatilities on Vercom SA and Beta MWIG40TR 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 Vercom SA with a short position of Beta MWIG40TR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vercom SA and Beta MWIG40TR.

Diversification Opportunities for Vercom SA and Beta MWIG40TR

0.81

Correlation Coefficient

Vercom SA  Beta MWIG40TR

Very poor diversification

The 3 months correlation between Vercom and Beta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vercom SA and Beta mWIG40TR Portfelowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta mWIG40TR Portfelowy and Vercom SA 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 Vercom SA are associated (or correlated) with Beta MWIG40TR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta mWIG40TR Portfelowy has no effect on the direction of Vercom SA i.e., Vercom SA and Beta MWIG40TR go up and down completely randomly.

Pair Corralation between Vercom SA and Beta MWIG40TR

Assuming the 90 days trading horizon Vercom SA is expected to generate 1.13 times less return on investment than Beta MWIG40TR. In addition to that, Vercom SA is 2.01 times more volatile than Beta mWIG40TR Portfelowy. It trades about 0.06 of its total potential returns per unit of risk. Beta mWIG40TR Portfelowy is currently generating about 0.15 per unit of volatility. If you would invest  11,700  in Beta mWIG40TR Portfelowy on April 24, 2025 and sell it today you would earn a total of  1,024  from holding Beta mWIG40TR Portfelowy or generate 8.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Vercom SA  vs.  Beta mWIG40TR Portfelowy

Vercom SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vercom SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Vercom SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Beta mWIG40TR Portfelowy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Beta mWIG40TR Portfelowy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beta MWIG40TR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vercom SA and Beta MWIG40TR

The main advantage of trading using opposite Vercom SA and Beta MWIG40TR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vercom SA position performs unexpectedly, Beta MWIG40TR 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 Beta MWIG40TR will offset losses from the drop in Beta MWIG40TR's long position.

The idea behind Vercom SA and Beta mWIG40TR Portfelowy 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.