Correlation Between Asseco South and MCI Management
Can any of the company-specific risk be diversified away by investing in both Asseco South and MCI Management 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 South and MCI Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asseco South Eastern and MCI Management SA, you can compare the effects of market volatilities on Asseco South and MCI Management 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 South with a short position of MCI Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco South and MCI Management.
Diversification Opportunities for Asseco South and MCI Management
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asseco and MCI is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern and MCI Management SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCI Management SA and Asseco South 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 South Eastern are associated (or correlated) with MCI Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCI Management SA has no effect on the direction of Asseco South i.e., Asseco South and MCI Management go up and down completely randomly.
Pair Corralation between Asseco South and MCI Management
Assuming the 90 days trading horizon Asseco South Eastern is expected to generate 1.13 times more return on investment than MCI Management. However, Asseco South is 1.13 times more volatile than MCI Management SA. It trades about -0.01 of its potential returns per unit of risk. MCI Management SA is currently generating about -0.21 per unit of risk. If you would invest 5,000 in Asseco South Eastern on September 13, 2024 and sell it today you would lose (30.00) from holding Asseco South Eastern or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asseco South Eastern vs. MCI Management SA
Performance |
| Timeline |
| Asseco South Eastern |
| MCI Management SA |
Asseco South and MCI Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asseco South and MCI Management
The main advantage of trading using opposite Asseco South and MCI Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco South position performs unexpectedly, MCI Management 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 MCI Management will offset losses from the drop in MCI Management's long position.| Asseco South vs. CI Games SA | Asseco South vs. Quantum Software SA | Asseco South vs. Medicalg | Asseco South vs. GreenX Metals |
| MCI Management vs. Echo Investment SA | MCI Management vs. Skyline Investment SA | MCI Management vs. Play2Chill SA | MCI Management vs. Quantum Software 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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