Correlation Between Asseco Poland and Intersport Polska

Can any of the company-specific risk be diversified away by investing in both Asseco Poland and Intersport Polska 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 Poland and Intersport Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asseco Poland SA and Intersport Polska SA, you can compare the effects of market volatilities on Asseco Poland and Intersport Polska 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 Poland with a short position of Intersport Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Poland and Intersport Polska.

Diversification Opportunities for Asseco Poland and Intersport Polska

0.3

Correlation Coefficient

Asseco Poland  Intersport Polska

Weak diversification

The 3 months correlation between Asseco and Intersport is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Poland SA and Intersport Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intersport Polska and Asseco Poland 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 Poland SA are associated (or correlated) with Intersport Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intersport Polska has no effect on the direction of Asseco Poland i.e., Asseco Poland and Intersport Polska go up and down completely randomly.

Pair Corralation between Asseco Poland and Intersport Polska

Assuming the 90 days trading horizon Asseco Poland SA is expected to generate 0.32 times more return on investment than Intersport Polska. However, Asseco Poland SA is 3.15 times less risky than Intersport Polska. It trades about 0.3 of its potential returns per unit of risk. Intersport Polska SA is currently generating about -0.03 per unit of risk. If you would invest  8,605  in Asseco Poland SA on September 24, 2024 and sell it today you would earn a total of  770.00  from holding Asseco Poland SA or generate 8.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Asseco Poland SA  vs.  Intersport Polska SA

Asseco Poland SA

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco Poland SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco Poland may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intersport Polska

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intersport Polska SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Intersport Polska reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asseco Poland and Intersport Polska

The main advantage of trading using opposite Asseco Poland and Intersport Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco Poland position performs unexpectedly, Intersport Polska 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 Intersport Polska will offset losses from the drop in Intersport Polska's long position.

The idea behind Asseco Poland SA and Intersport Polska SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.