Correlation Between Asseco Business and New Tech
Can any of the company-specific risk be diversified away by investing in both Asseco Business and New Tech 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 Asseco Business and New Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asseco Business Solutions and New Tech Venture, you can compare the effects of market volatilities on Asseco Business and New Tech 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 Asseco Business with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Business and New Tech.
Diversification Opportunities for Asseco Business and New Tech
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asseco and New is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Business Solutions and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture and Asseco Business 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 Asseco Business Solutions are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of Asseco Business i.e., Asseco Business and New Tech go up and down completely randomly.
Pair Corralation between Asseco Business and New Tech
Assuming the 90 days trading horizon Asseco Business Solutions is expected to generate 0.42 times more return on investment than New Tech. However, Asseco Business Solutions is 2.38 times less risky than New Tech. It trades about 0.07 of its potential returns per unit of risk. New Tech Venture is currently generating about -0.01 per unit of risk. If you would invest 3,883 in Asseco Business Solutions on August 26, 2024 and sell it today you would earn a total of 1,577 from holding Asseco Business Solutions or generate 40.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.13% |
| Values | Daily Returns |
Asseco Business Solutions vs. New Tech Venture
Performance |
| Timeline |
| Asseco Business Solutions |
| New Tech Venture |
Asseco Business and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asseco Business and New Tech
The main advantage of trading using opposite Asseco Business and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco Business position performs unexpectedly, New Tech 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 New Tech will offset losses from the drop in New Tech's long position.| Asseco Business vs. Road Studio SA | Asseco Business vs. Intersport Polska SA | Asseco Business vs. 3R Games SA | Asseco Business vs. BNP Paribas Bank |
| New Tech vs. Gremi Media SA | New Tech vs. Asseco Business Solutions | New Tech vs. Detalion Games SA | New Tech vs. Asseco South Eastern |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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