Correlation Between Asseco Poland and New Tech

Can any of the company-specific risk be diversified away by investing in both Asseco Poland and New Tech 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 New Tech 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 New Tech Venture, you can compare the effects of market volatilities on Asseco Poland and New Tech 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 New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Poland and New Tech.

Diversification Opportunities for Asseco Poland and New Tech

0.62

Correlation Coefficient

Asseco Poland  New Tech

Poor diversification

The 3 months correlation between Asseco and New is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Poland SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture 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 New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of Asseco Poland i.e., Asseco Poland and New Tech go up and down completely randomly.

Pair Corralation between Asseco Poland and New Tech

Assuming the 90 days trading horizon Asseco Poland is expected to generate 1.21 times less return on investment than New Tech. But when comparing it to its historical volatility, Asseco Poland SA is 4.64 times less risky than New Tech. It trades about 0.42 of its potential returns per unit of risk. New Tech Venture is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  11.00  in New Tech Venture on December 30, 2024 and sell it today you would earn a total of  5.00  from holding New Tech Venture or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

Asseco Poland SA  vs.  New Tech Venture

Asseco Poland SA

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco Poland SA are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco Poland reported solid returns over the last few months and may actually be approaching a breakup point.

New Tech Venture

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New Tech Venture are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, New Tech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asseco Poland and New Tech

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

The idea behind Asseco Poland SA and New Tech Venture 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.