Correlation Between Erbud SA and Asseco South
Can any of the company-specific risk be diversified away by investing in both Erbud SA and Asseco South 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 Erbud SA and Asseco South into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erbud SA and Asseco South Eastern, you can compare the effects of market volatilities on Erbud SA and Asseco South 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 Erbud SA with a short position of Asseco South. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erbud SA and Asseco South.
Diversification Opportunities for Erbud SA and Asseco South
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erbud and Asseco is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Erbud SA and Asseco South Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco South Eastern and Erbud 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 Erbud SA are associated (or correlated) with Asseco South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco South Eastern has no effect on the direction of Erbud SA i.e., Erbud SA and Asseco South go up and down completely randomly.
Pair Corralation between Erbud SA and Asseco South
Assuming the 90 days trading horizon Erbud SA is expected to generate 1.33 times less return on investment than Asseco South. In addition to that, Erbud SA is 1.49 times more volatile than Asseco South Eastern. It trades about 0.01 of its total potential returns per unit of risk. Asseco South Eastern is currently generating about 0.02 per unit of volatility. If you would invest 4,598 in Asseco South Eastern on September 2, 2024 and sell it today you would earn a total of 272.00 from holding Asseco South Eastern or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erbud SA vs. Asseco South Eastern
Performance |
| Timeline |
| Erbud SA |
| Asseco South Eastern |
Erbud SA and Asseco South Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erbud SA and Asseco South
The main advantage of trading using opposite Erbud SA and Asseco South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erbud SA position performs unexpectedly, Asseco South 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 South will offset losses from the drop in Asseco South's long position.| Erbud SA vs. Banco Santander SA | Erbud SA vs. UniCredit SpA | Erbud SA vs. CEZ as | Erbud SA vs. Polski Koncern Naftowy |
| Asseco South vs. Banco Santander SA | Asseco South vs. UniCredit SpA | Asseco South vs. CEZ as | Asseco South vs. Polski Koncern Naftowy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |