Correlation Between Cadence Design and Asseco Poland
Can any of the company-specific risk be diversified away by investing in both Cadence Design and Asseco Poland 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 Cadence Design and Asseco Poland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadence Design Systems and Asseco Poland SA, you can compare the effects of market volatilities on Cadence Design and Asseco Poland 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 Cadence Design with a short position of Asseco Poland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and Asseco Poland.
Diversification Opportunities for Cadence Design and Asseco Poland
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cadence and Asseco is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems and Asseco Poland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Poland SA and Cadence Design 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 Cadence Design Systems are associated (or correlated) with Asseco Poland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Poland SA has no effect on the direction of Cadence Design i.e., Cadence Design and Asseco Poland go up and down completely randomly.
Pair Corralation between Cadence Design and Asseco Poland
Given the investment horizon of 90 days Cadence Design Systems is expected to generate 1.13 times more return on investment than Asseco Poland. However, Cadence Design is 1.13 times more volatile than Asseco Poland SA. It trades about 0.3 of its potential returns per unit of risk. Asseco Poland SA is currently generating about -0.22 per unit of risk. If you would invest 27,612 in Cadence Design Systems on September 1, 2024 and sell it today you would earn a total of 3,069 from holding Cadence Design Systems or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadence Design Systems vs. Asseco Poland SA
Performance |
| Timeline |
| Cadence Design Systems |
| Asseco Poland SA |
Cadence Design and Asseco Poland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadence Design and Asseco Poland
The main advantage of trading using opposite Cadence Design and Asseco Poland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Design position performs unexpectedly, Asseco Poland 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 Asseco Poland will offset losses from the drop in Asseco Poland's long position.| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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