Correlation Between Asseco South and New Tech
Can any of the company-specific risk be diversified away by investing in both Asseco South 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 South 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 South Eastern and New Tech Venture, you can compare the effects of market volatilities on Asseco South 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 South with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco South and New Tech.
Diversification Opportunities for Asseco South and New Tech
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asseco and New is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern 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 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 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 South i.e., Asseco South and New Tech go up and down completely randomly.
Pair Corralation between Asseco South and New Tech
Assuming the 90 days trading horizon Asseco South Eastern is expected to generate 0.4 times more return on investment than New Tech. However, Asseco South Eastern is 2.48 times less risky than New Tech. It trades about -0.01 of its potential returns per unit of risk. New Tech Venture is currently generating about -0.22 per unit of risk. If you would invest 4,900 in Asseco South Eastern on November 8, 2024 and sell it today you would lose (10.00) from holding Asseco South Eastern or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Asseco South Eastern vs. New Tech Venture
Performance |
| Timeline |
| Asseco South Eastern |
| New Tech Venture |
Asseco South and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asseco South and New Tech
The main advantage of trading using opposite Asseco South and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco South 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 South vs. LSI Software SA | Asseco South vs. New Tech Venture | Asseco South vs. SOFTWARE MANSION SPOLKA | Asseco South vs. Quantum Software SA |
| New Tech vs. TEN SQUARE GAMES | New Tech vs. Centrum Finansowe Banku | New Tech vs. Bank Millennium SA | New Tech vs. True Games Syndicate |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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