Correlation Between Globe Trade and Asseco South

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

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

Diversification Opportunities for Globe Trade and Asseco South

0.16

Correlation Coefficient

Globe Trade  Asseco South

Average diversification

The 3 months correlation between Globe and Asseco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Asseco South Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco South Eastern and Globe Trade 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 Globe Trade Centre are associated (or correlated) with Asseco South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco South Eastern has no effect on the direction of Globe Trade i.e., Globe Trade and Asseco South go up and down completely randomly.

Pair Corralation between Globe Trade and Asseco South

Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the Asseco South. In addition to that, Globe Trade is 1.69 times more volatile than Asseco South Eastern. It trades about -0.01 of its total potential returns per unit of risk. Asseco South Eastern is currently generating about 0.02 per unit of volatility. If you would invest  4,536  in Asseco South Eastern on October 11, 2024 and sell it today you would earn a total of  414.00  from holding Asseco South Eastern or generate 9.13% return on investment over 90 days.

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

Globe Trade Centre  vs.  Asseco South Eastern

Globe Trade Centre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globe Trade Centre has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Globe Trade and Asseco South

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

The idea behind Globe Trade Centre and Asseco South Eastern 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.