Correlation Between New Tech and Asseco Poland
Can any of the company-specific risk be diversified away by investing in both New Tech and Asseco Poland 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 New Tech and Asseco Poland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Tech Venture and Asseco Poland SA, you can compare the effects of market volatilities on New Tech and Asseco Poland 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 New Tech with a short position of Asseco Poland. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Tech and Asseco Poland.
Diversification Opportunities for New Tech and Asseco Poland
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Asseco is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding New Tech Venture and Asseco Poland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Poland SA and New Tech 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 New Tech Venture are associated (or correlated) with Asseco Poland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Poland SA has no effect on the direction of New Tech i.e., New Tech and Asseco Poland go up and down completely randomly.
Pair Corralation between New Tech and Asseco Poland
Assuming the 90 days trading horizon New Tech Venture is expected to under-perform the Asseco Poland. In addition to that, New Tech is 2.61 times more volatile than Asseco Poland SA. It trades about -0.01 of its total potential returns per unit of risk. Asseco Poland SA is currently generating about 0.06 per unit of volatility. If you would invest 7,183 in Asseco Poland SA on September 12, 2024 and sell it today you would earn a total of 2,072 from holding Asseco Poland SA or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.76% |
| Values | Daily Returns |
New Tech Venture vs. Asseco Poland SA
Performance |
| Timeline |
| New Tech Venture |
| Asseco Poland SA |
New Tech and Asseco Poland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Tech and Asseco Poland
The main advantage of trading using opposite New Tech and Asseco Poland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Tech position performs unexpectedly, Asseco Poland 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 Poland will offset losses from the drop in Asseco Poland's long position.| New Tech vs. ING Bank lski | New Tech vs. Quantum Software SA | New Tech vs. SOFTWARE MANSION SPOLKA | New Tech vs. PMPG Polskie Media |
| Asseco Poland vs. Drago entertainment SA | Asseco Poland vs. New Tech Venture | Asseco Poland vs. Medicofarma Biotech SA | Asseco Poland vs. Inter Cars 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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