Correlation Between E Xim and Asseco South
Can any of the company-specific risk be diversified away by investing in both E Xim 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 E Xim and Asseco South into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Xim IT and Asseco South Eastern, you can compare the effects of market volatilities on E Xim 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 E Xim with a short position of Asseco South. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Xim and Asseco South.
Diversification Opportunities for E Xim and Asseco South
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between EXM and Asseco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding E Xim IT 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 E Xim 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 E Xim IT 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 E Xim i.e., E Xim and Asseco South go up and down completely randomly.
Pair Corralation between E Xim and Asseco South
Assuming the 90 days trading horizon E Xim IT is expected to generate 2.8 times more return on investment than Asseco South. However, E Xim is 2.8 times more volatile than Asseco South Eastern. It trades about 0.53 of its potential returns per unit of risk. Asseco South Eastern is currently generating about 0.04 per unit of risk. If you would invest 13,900 in E Xim IT on August 26, 2024 and sell it today you would earn a total of 2,600 from holding E Xim IT or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.0% |
| Values | Daily Returns |
E Xim IT vs. Asseco South Eastern
Performance |
| Timeline |
| E Xim IT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Asseco South Eastern |
E Xim and Asseco South Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Xim and Asseco South
The main advantage of trading using opposite E Xim and Asseco South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Xim 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.The idea behind E Xim IT and Asseco South Eastern 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.| Asseco South vs. Echo Investment SA | Asseco South vs. Mlk Foods Public | Asseco South vs. Quantum Software SA | Asseco South vs. Cloud Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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