Correlation Between Asseco South and PCC Rokita

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

Diversification Opportunities for Asseco South and PCC Rokita

0.46

Correlation Coefficient

Asseco South  PCC Rokita

Very weak diversification

The 3 months correlation between Asseco and PCC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern and PCC Rokita SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCC Rokita SA 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 PCC Rokita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCC Rokita SA has no effect on the direction of Asseco South i.e., Asseco South and PCC Rokita go up and down completely randomly.

Pair Corralation between Asseco South and PCC Rokita

Assuming the 90 days trading horizon Asseco South Eastern is expected to generate 0.73 times more return on investment than PCC Rokita. However, Asseco South Eastern is 1.38 times less risky than PCC Rokita. It trades about -0.04 of its potential returns per unit of risk. PCC Rokita SA is currently generating about -0.12 per unit of risk. If you would invest  4,970  in Asseco South Eastern on October 24, 2024 and sell it today you would lose (140.00) from holding Asseco South Eastern or give up 2.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.25%
Values	Daily Returns

Asseco South Eastern  vs.  PCC Rokita SA

Asseco South Eastern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asseco South Eastern has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Asseco South is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

PCC Rokita SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCC Rokita SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Asseco South and PCC Rokita

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

The idea behind Asseco South Eastern and PCC Rokita 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.