Correlation Between MW Trade and Asseco Business
Can any of the company-specific risk be diversified away by investing in both MW Trade 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 MW Trade and Asseco Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MW Trade SA and Asseco Business Solutions, you can compare the effects of market volatilities on MW Trade 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 MW Trade with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Trade and Asseco Business.
Diversification Opportunities for MW Trade and Asseco Business
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MWT and Asseco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MW Trade 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 MW Trade 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 MW Trade 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 MW Trade i.e., MW Trade and Asseco Business go up and down completely randomly.
Pair Corralation between MW Trade and Asseco Business
Assuming the 90 days trading horizon MW Trade SA is expected to under-perform the Asseco Business. In addition to that, MW Trade is 1.36 times more volatile than Asseco Business Solutions. It trades about -0.04 of its total potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.05 per unit of volatility. If you would invest 3,912 in Asseco Business Solutions on August 31, 2024 and sell it today you would earn a total of 1,188 from holding Asseco Business Solutions or generate 30.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MW Trade SA vs. Asseco Business Solutions
Performance |
| Timeline |
| MW Trade SA |
| Asseco Business Solutions |
MW Trade and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MW Trade and Asseco Business
The main advantage of trading using opposite MW Trade and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW Trade 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.| MW Trade vs. Investment Friends Capital | MW Trade vs. Asseco Business Solutions | MW Trade vs. Detalion Games SA | MW Trade vs. Asseco South Eastern |
| Asseco Business vs. Asseco Poland SA | Asseco Business vs. LSI Software SA | Asseco Business vs. Quantum Software SA | Asseco Business vs. Detalion 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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