Correlation Between Asseco South and VR Factory
Can any of the company-specific risk be diversified away by investing in both Asseco South and VR Factory 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 VR Factory 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 VR Factory Games, you can compare the effects of market volatilities on Asseco South and VR Factory 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 VR Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco South and VR Factory.
Diversification Opportunities for Asseco South and VR Factory
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asseco and VRF is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern and VR Factory Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Factory Games 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 VR Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Factory Games has no effect on the direction of Asseco South i.e., Asseco South and VR Factory go up and down completely randomly.
Pair Corralation between Asseco South and VR Factory
Assuming the 90 days trading horizon Asseco South Eastern is expected to generate 0.23 times more return on investment than VR Factory. However, Asseco South Eastern is 4.26 times less risky than VR Factory. It trades about -0.04 of its potential returns per unit of risk. VR Factory Games is currently generating about -0.05 per unit of risk. If you would invest 4,930 in Asseco South Eastern on August 30, 2024 and sell it today you would lose (120.00) from holding Asseco South Eastern or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Asseco South Eastern vs. VR Factory Games
Performance |
| Timeline |
| Asseco South Eastern |
| VR Factory Games |
Asseco South and VR Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asseco South and VR Factory
The main advantage of trading using opposite Asseco South and VR Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco South position performs unexpectedly, VR Factory 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 VR Factory will offset losses from the drop in VR Factory's long position.| Asseco South vs. UF Games SA | Asseco South vs. LSI Software SA | Asseco South vs. CI Games SA | Asseco South vs. SOFTWARE MANSION SPOLKA |
| VR Factory vs. NGG | VR Factory vs. Asseco Business Solutions | VR Factory vs. Detalion Games SA | VR Factory vs. CFI Holding 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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