Correlation Between ASICS and PUMA SE

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

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

Diversification Opportunities for ASICS and PUMA SE

-0.6

Correlation Coefficient

ASICS  PUMA SE

Excellent diversification

The 3 months correlation between ASICS and PUMA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ASICS and PUMA SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE and ASICS 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 ASICS are associated (or correlated) with PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE has no effect on the direction of ASICS i.e., ASICS and PUMA SE go up and down completely randomly.

Pair Corralation between ASICS and PUMA SE

Assuming the 90 days horizon ASICS is expected to generate 21.38 times less return on investment than PUMA SE. In addition to that, ASICS is 1.41 times more volatile than PUMA SE. It trades about 0.0 of its total potential returns per unit of risk. PUMA SE is currently generating about 0.07 per unit of volatility. If you would invest  433.00  in PUMA SE on September 3, 2024 and sell it today you would earn a total of  33.00  from holding PUMA SE or generate 7.62% return on investment over 90 days.

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

ASICS  vs.  PUMA SE

ASICS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASICS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, ASICS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

PUMA SE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PUMA SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, PUMA SE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ASICS and PUMA SE

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

The idea behind ASICS and PUMA SE 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.