Correlation Between Asseco Business and IMC SA
Can any of the company-specific risk be diversified away by investing in both Asseco Business and IMC SA 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 IMC SA 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 IMC SA, you can compare the effects of market volatilities on Asseco Business and IMC SA 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 IMC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Business and IMC SA.
Diversification Opportunities for Asseco Business and IMC SA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asseco and IMC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Business Solutions and IMC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMC SA 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 IMC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMC SA has no effect on the direction of Asseco Business i.e., Asseco Business and IMC SA go up and down completely randomly.
Pair Corralation between Asseco Business and IMC SA
Assuming the 90 days trading horizon Asseco Business is expected to generate 3.07 times less return on investment than IMC SA. But when comparing it to its historical volatility, Asseco Business Solutions is 2.75 times less risky than IMC SA. It trades about 0.25 of its potential returns per unit of risk. IMC SA is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,325 in IMC SA on December 1, 2024 and sell it today you would earn a total of 1,645 from holding IMC SA or generate 124.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Asseco Business Solutions vs. IMC SA
Performance |
Timeline |
Asseco Business Solutions |
IMC SA |
Asseco Business and IMC SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asseco Business and IMC SA
The main advantage of trading using opposite Asseco Business and IMC SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco Business position performs unexpectedly, IMC SA 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 IMC SA will offset losses from the drop in IMC SA's long position.Asseco Business vs. LSI Software SA | Asseco Business vs. SOFTWARE MANSION SPOLKA | Asseco Business vs. Road Studio SA | Asseco Business vs. Marie Brizard Wine |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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