Correlation Between Asseco South and Carlson Investments

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

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

Diversification Opportunities for Asseco South and Carlson Investments

0.07

Correlation Coefficient

Asseco South  Carlson Investments

Significant diversification

The 3 months correlation between Asseco and Carlson is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and Asseco South 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 South Eastern are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Asseco South i.e., Asseco South and Carlson Investments go up and down completely randomly.

Pair Corralation between Asseco South and Carlson Investments

Assuming the 90 days trading horizon Asseco South is expected to generate 1.34 times less return on investment than Carlson Investments. But when comparing it to its historical volatility, Asseco South Eastern is 4.91 times less risky than Carlson Investments. It trades about 0.23 of its potential returns per unit of risk. Carlson Investments SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  359.00  in Carlson Investments SA on December 28, 2024 and sell it today you would earn a total of  55.00  from holding Carlson Investments SA or generate 15.32% return on investment over 90 days.

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

Asseco South Eastern  vs.  Carlson Investments SA

Asseco South Eastern

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco South Eastern are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco South reported solid returns over the last few months and may actually be approaching a breakup point.

Carlson Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlson Investments SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Carlson Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asseco South and Carlson Investments

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

The idea behind Asseco South Eastern and Carlson Investments 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.