Correlation Between LPP SA and Asseco Business
Can any of the company-specific risk be diversified away by investing in both LPP 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 LPP 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 LPP SA and Asseco Business Solutions, you can compare the effects of market volatilities on LPP 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 LPP SA with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPP SA and Asseco Business.
Diversification Opportunities for LPP SA and Asseco Business
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LPP and Asseco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding LPP 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 LPP 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 LPP 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 LPP SA i.e., LPP SA and Asseco Business go up and down completely randomly.
Pair Corralation between LPP SA and Asseco Business
Assuming the 90 days trading horizon LPP SA is expected to generate 1.3 times more return on investment than Asseco Business. However, LPP SA is 1.3 times more volatile than Asseco Business Solutions. It trades about 0.06 of its potential returns per unit of risk. Asseco Business Solutions is currently generating about -0.06 per unit of risk. If you would invest 1,470,164 in LPP SA on August 26, 2024 and sell it today you would earn a total of 66,836 from holding LPP SA or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPP SA vs. Asseco Business Solutions
Performance |
| Timeline |
| LPP SA |
| Asseco Business Solutions |
LPP SA and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPP SA and Asseco Business
The main advantage of trading using opposite LPP SA and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPP 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.| LPP SA vs. Esotiq Henderson SA | LPP SA vs. Asseco Business Solutions | LPP SA vs. Detalion Games SA | LPP SA vs. Asseco South Eastern |
| Asseco Business vs. Immobile | Asseco Business vs. UniCredit SpA | Asseco Business vs. Mlk Foods Public | Asseco Business vs. Movie Games 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |