Correlation Between ASOS Plc and Allegroeu
Can any of the company-specific risk be diversified away by investing in both ASOS Plc and Allegroeu 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 ASOS Plc and Allegroeu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASOS Plc and Allegroeu SA, you can compare the effects of market volatilities on ASOS Plc and Allegroeu 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 ASOS Plc with a short position of Allegroeu. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASOS Plc and Allegroeu.
Diversification Opportunities for ASOS Plc and Allegroeu
Very poor diversification
The 3 months correlation between ASOS and Allegroeu is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ASOS Plc and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu SA and ASOS Plc 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 ASOS Plc are associated (or correlated) with Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of ASOS Plc i.e., ASOS Plc and Allegroeu go up and down completely randomly.
Pair Corralation between ASOS Plc and Allegroeu
Assuming the 90 days horizon ASOS Plc is expected to generate 0.86 times more return on investment than Allegroeu. However, ASOS Plc is 1.16 times less risky than Allegroeu. It trades about -0.16 of its potential returns per unit of risk. Allegroeu SA is currently generating about -0.16 per unit of risk. If you would invest 541.00 in ASOS Plc on November 2, 2024 and sell it today you would lose (51.00) from holding ASOS Plc or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASOS Plc vs. Allegroeu SA
Performance |
| Timeline |
| ASOS Plc |
| Allegroeu SA |
ASOS Plc and Allegroeu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASOS Plc and Allegroeu
The main advantage of trading using opposite ASOS Plc and Allegroeu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASOS Plc position performs unexpectedly, Allegroeu 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 Allegroeu will offset losses from the drop in Allegroeu's long position.| ASOS Plc vs. BoohooCom PLC ADR | ASOS Plc vs. Allegroeu SA | ASOS Plc vs. ZALANDO SE ADR | ASOS Plc vs. AKA Brands Holding |
| Allegroeu vs. Phonex Inc | Allegroeu vs. Delivery Hero SE | Allegroeu vs. 1StdibsCom | Allegroeu vs. Natural Health Trend |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |