Correlation Between Novavis Group and Asseco Business
Can any of the company-specific risk be diversified away by investing in both Novavis Group 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 Novavis Group and Asseco Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novavis Group SA and Asseco Business Solutions, you can compare the effects of market volatilities on Novavis Group 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 Novavis Group with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavis Group and Asseco Business.
Diversification Opportunities for Novavis Group and Asseco Business
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Novavis and Asseco is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Novavis Group 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 Novavis Group 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 Novavis Group 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 Novavis Group i.e., Novavis Group and Asseco Business go up and down completely randomly.
Pair Corralation between Novavis Group and Asseco Business
Assuming the 90 days trading horizon Novavis Group SA is expected to under-perform the Asseco Business. In addition to that, Novavis Group is 1.19 times more volatile than Asseco Business Solutions. It trades about -0.26 of its total potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.02 per unit of volatility. If you would invest 5,780 in Asseco Business Solutions on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Asseco Business Solutions or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novavis Group SA vs. Asseco Business Solutions
Performance |
| Timeline |
| Novavis Group SA |
| Asseco Business Solutions |
Novavis Group and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novavis Group and Asseco Business
The main advantage of trading using opposite Novavis Group and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavis Group 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.| Novavis Group vs. Bank Millennium SA | Novavis Group vs. BNP Paribas Bank | Novavis Group vs. Movie Games SA | Novavis Group vs. New Tech Venture |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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