Correlation Between Asseco South and Powszechna Kasa

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

Diversification Opportunities for Asseco South and Powszechna Kasa

0.77

Correlation Coefficient

Asseco South  Powszechna Kasa

Poor diversification

The 3 months correlation between Asseco and Powszechna is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern and Powszechna Kasa Oszczednosci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechna Kasa Oszc 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 Powszechna Kasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechna Kasa Oszc has no effect on the direction of Asseco South i.e., Asseco South and Powszechna Kasa go up and down completely randomly.

Pair Corralation between Asseco South and Powszechna Kasa

Assuming the 90 days trading horizon Asseco South is expected to generate 1.48 times less return on investment than Powszechna Kasa. But when comparing it to its historical volatility, Asseco South Eastern is 1.5 times less risky than Powszechna Kasa. It trades about 0.21 of its potential returns per unit of risk. Powszechna Kasa Oszczednosci is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5,980  in Powszechna Kasa Oszczednosci on December 25, 2024 and sell it today you would earn a total of  1,698  from holding Powszechna Kasa Oszczednosci or generate 28.39% return on investment over 90 days.

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

Asseco South Eastern  vs.  Powszechna Kasa Oszczednosci

Asseco South Eastern

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco South Eastern are ranked lower than 16 (%) 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.

Powszechna Kasa Oszc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechna Kasa reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asseco South and Powszechna Kasa

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

The idea behind Asseco South Eastern and Powszechna Kasa Oszczednosci 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.