Correlation Between ASOS Plc and Cnova NV
Can any of the company-specific risk be diversified away by investing in both ASOS Plc and Cnova NV 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 Cnova NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASOS plc PK and Cnova NV, you can compare the effects of market volatilities on ASOS Plc and Cnova NV 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 Cnova NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASOS Plc and Cnova NV.
Diversification Opportunities for ASOS Plc and Cnova NV
Pay attention - limited upside
The 3 months correlation between ASOS and Cnova is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASOS plc PK and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV 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 PK are associated (or correlated) with Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of ASOS Plc i.e., ASOS Plc and Cnova NV go up and down completely randomly.
Pair Corralation between ASOS Plc and Cnova NV
If you would invest 471.00 in ASOS plc PK on August 25, 2024 and sell it today you would lose (13.00) from holding ASOS plc PK or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.53% |
| Values | Daily Returns |
ASOS plc PK vs. Cnova NV
Performance |
| Timeline |
| ASOS plc PK |
| Cnova NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ASOS Plc and Cnova NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASOS Plc and Cnova NV
The main advantage of trading using opposite ASOS Plc and Cnova NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASOS Plc position performs unexpectedly, Cnova NV 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 Cnova NV will offset losses from the drop in Cnova NV's long position.The idea behind ASOS plc PK and Cnova NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cnova NV vs. ZALANDO SE ADR | Cnova NV vs. Meiwu Technology Co | Cnova NV vs. Alibaba Group Holding | Cnova NV vs. PDD Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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