Correlation Between M Food and Asseco Business
Can any of the company-specific risk be diversified away by investing in both M Food 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 M Food and Asseco Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Food SA and Asseco Business Solutions, you can compare the effects of market volatilities on M Food 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 M Food with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Food and Asseco Business.
Diversification Opportunities for M Food and Asseco Business
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFD and Asseco is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding M Food 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 M Food 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 M Food 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 M Food i.e., M Food and Asseco Business go up and down completely randomly.
Pair Corralation between M Food and Asseco Business
Assuming the 90 days trading horizon M Food SA is expected to generate 1.48 times more return on investment than Asseco Business. However, M Food is 1.48 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 -0.24 per unit of risk. If you would invest 116.00 in M Food SA on September 4, 2024 and sell it today you would lose (3.00) from holding M Food SA or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 47.62% |
| Values | Daily Returns |
M Food SA vs. Asseco Business Solutions
Performance |
| Timeline |
| M Food SA |
| Asseco Business Solutions |
M Food and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Food and Asseco Business
The main advantage of trading using opposite M Food and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Food 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.| M Food vs. Asseco Business Solutions | M Food vs. Kogeneracja SA | M Food vs. Asseco South Eastern | M Food vs. Movie Games SA |
| Asseco Business vs. Gamedust SA | Asseco Business vs. Varsav Game Studios | Asseco Business vs. GreenX Metals | Asseco Business vs. PMPG Polskie Media |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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