Correlation Between Abak SA and Asseco Business
Can any of the company-specific risk be diversified away by investing in both Abak SA and Asseco Business 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 Abak SA and Asseco Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abak SA and Asseco Business Solutions, you can compare the effects of market volatilities on Abak SA and Asseco Business 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 Abak SA with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abak SA and Asseco Business.
Diversification Opportunities for Abak SA and Asseco Business
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Abak and Asseco is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Abak SA and Asseco Business Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Business Solutions and Abak 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 Abak SA are associated (or correlated) with Asseco Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Business Solutions has no effect on the direction of Abak SA i.e., Abak SA and Asseco Business go up and down completely randomly.
Pair Corralation between Abak SA and Asseco Business
Assuming the 90 days trading horizon Abak SA is expected to generate 1.73 times less return on investment than Asseco Business. In addition to that, Abak SA is 2.27 times more volatile than Asseco Business Solutions. It trades about 0.02 of its total potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.07 per unit of volatility. If you would invest 3,540 in Asseco Business Solutions on November 2, 2024 and sell it today you would earn a total of 2,600 from holding Asseco Business Solutions or generate 73.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 44.49% |
| Values | Daily Returns |
Abak SA vs. Asseco Business Solutions
Performance |
| Timeline |
| Abak SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Asseco Business Solutions |
Abak SA and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abak SA and Asseco Business
The main advantage of trading using opposite Abak SA and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abak SA position performs unexpectedly, Asseco Business 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 Asseco Business will offset losses from the drop in Asseco Business' long position.The idea behind Abak SA and Asseco Business Solutions 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.| Asseco Business vs. Vivid Games SA | Asseco Business vs. Movie Games SA | Asseco Business vs. Ultimate Games SA | Asseco Business vs. Gaming Factory SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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