Correlation Between Comp SA and Asseco Business
Can any of the company-specific risk be diversified away by investing in both Comp SA and Asseco Business 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 Comp SA and Asseco Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comp SA and Asseco Business Solutions, you can compare the effects of market volatilities on Comp SA and Asseco Business 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 Comp SA with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comp SA and Asseco Business.
Diversification Opportunities for Comp SA and Asseco Business
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comp and Asseco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Comp SA and Asseco Business Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Business Solutions and Comp SA 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 Comp SA are associated (or correlated) with Asseco Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Business Solutions has no effect on the direction of Comp SA i.e., Comp SA and Asseco Business go up and down completely randomly.
Pair Corralation between Comp SA and Asseco Business
Assuming the 90 days trading horizon Comp SA is expected to generate 1.02 times more return on investment than Asseco Business. However, Comp SA is 1.02 times more volatile than Asseco Business Solutions. It trades about 0.12 of its potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.08 per unit of risk. If you would invest 4,470 in Comp SA on August 30, 2024 and sell it today you would earn a total of 7,130 from holding Comp SA or generate 159.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comp SA vs. Asseco Business Solutions
Performance |
| Timeline |
| Comp SA |
| Asseco Business Solutions |
Comp SA and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comp SA and Asseco Business
The main advantage of trading using opposite Comp SA and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comp SA position performs unexpectedly, Asseco Business 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 Business will offset losses from the drop in Asseco Business' long position.| Comp SA vs. Saule Technologies SA | Comp SA vs. Santander Bank Polska | Comp SA vs. Tower Investments SA | Comp SA vs. Noble Financials 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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