Correlation Between Asseco Business and Esotiq Henderson
Can any of the company-specific risk be diversified away by investing in both Asseco Business and Esotiq Henderson 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 Asseco Business and Esotiq Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asseco Business Solutions and Esotiq Henderson SA, you can compare the effects of market volatilities on Asseco Business and Esotiq Henderson 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 Asseco Business with a short position of Esotiq Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Business and Esotiq Henderson.
Diversification Opportunities for Asseco Business and Esotiq Henderson
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asseco and Esotiq is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Business Solutions and Esotiq Henderson SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esotiq Henderson and Asseco Business 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 Asseco Business Solutions are associated (or correlated) with Esotiq Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esotiq Henderson has no effect on the direction of Asseco Business i.e., Asseco Business and Esotiq Henderson go up and down completely randomly.
Pair Corralation between Asseco Business and Esotiq Henderson
Assuming the 90 days trading horizon Asseco Business Solutions is expected to generate 1.45 times more return on investment than Esotiq Henderson. However, Asseco Business is 1.45 times more volatile than Esotiq Henderson SA. It trades about 0.17 of its potential returns per unit of risk. Esotiq Henderson SA is currently generating about -0.15 per unit of risk. If you would invest 5,680 in Asseco Business Solutions on December 30, 2024 and sell it today you would earn a total of 1,200 from holding Asseco Business Solutions or generate 21.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Asseco Business Solutions vs. Esotiq Henderson SA
Performance |
Timeline |
Asseco Business Solutions |
Esotiq Henderson |
Asseco Business and Esotiq Henderson Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asseco Business and Esotiq Henderson
The main advantage of trading using opposite Asseco Business and Esotiq Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco Business position performs unexpectedly, Esotiq Henderson 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 Esotiq Henderson will offset losses from the drop in Esotiq Henderson's long position.Asseco Business vs. Quantum Software SA | Asseco Business vs. Igoria Trade SA | Asseco Business vs. Alior Bank SA | Asseco Business vs. Noble Financials SA |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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