Correlation Between Notoria and Asseco Business

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

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

Diversification Opportunities for Notoria and Asseco Business

-0.49

Correlation Coefficient

Notoria  Asseco Business

Very good diversification

The 3 months correlation between Notoria and Asseco is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Notoria and Asseco Business Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Business Solutions and Notoria 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 Notoria are associated (or correlated) with Asseco Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Business Solutions has no effect on the direction of Notoria i.e., Notoria and Asseco Business go up and down completely randomly.

Pair Corralation between Notoria and Asseco Business

Assuming the 90 days trading horizon Notoria is expected to generate 0.98 times more return on investment than Asseco Business. However, Notoria is 1.03 times less risky than Asseco Business. It trades about 0.25 of its potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.13 per unit of risk. If you would invest  830.00  in Notoria on December 31, 2024 and sell it today you would earn a total of  50.00  from holding Notoria or generate 6.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	22.58%
Values	Daily Returns

Notoria  vs.  Asseco Business Solutions

Notoria

Risk-Adjusted Performance

Solid

Over the last 90 days Notoria has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Notoria reported solid returns over the last few months and may actually be approaching a breakup point.

Asseco Business Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco Business Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco Business reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Notoria and Asseco Business

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

The idea behind Notoria and Asseco Business Solutions 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.