Correlation Between Powszechna Kasa and Asseco Business

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

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

Diversification Opportunities for Powszechna Kasa and Asseco Business

0.51

Correlation Coefficient

Powszechna Kasa  Asseco Business

Very weak diversification

The 3 months correlation between Powszechna and Asseco is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Powszechna Kasa Oszczednosci 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 Powszechna Kasa 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 Powszechna Kasa Oszczednosci 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 Powszechna Kasa i.e., Powszechna Kasa and Asseco Business go up and down completely randomly.

Pair Corralation between Powszechna Kasa and Asseco Business

Assuming the 90 days trading horizon Powszechna Kasa Oszczednosci is expected to under-perform the Asseco Business. But the stock apears to be less risky and, when comparing its historical volatility, Powszechna Kasa Oszczednosci is 1.84 times less risky than Asseco Business. The stock trades about -0.06 of its potential returns per unit of risk. The Asseco Business Solutions is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5,680  in Asseco Business Solutions on October 7, 2024 and sell it today you would earn a total of  360.00  from holding Asseco Business Solutions or generate 6.34% return on investment over 90 days.

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

Powszechna Kasa Oszczednosci  vs.  Asseco Business Solutions

Powszechna Kasa Oszc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Powszechna Kasa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Asseco Business Solutions

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco Business Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco Business may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Powszechna Kasa and Asseco Business

The main advantage of trading using opposite Powszechna Kasa and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powszechna Kasa 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 Powszechna Kasa Oszczednosci 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.

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