Correlation Between Quantum Software and Asseco Poland

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Can any of the company-specific risk be diversified away by investing in both Quantum Software and Asseco Poland 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 Quantum Software and Asseco Poland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantum Software SA and Asseco Poland SA, you can compare the effects of market volatilities on Quantum Software and Asseco Poland 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 Quantum Software with a short position of Asseco Poland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantum Software and Asseco Poland.

Diversification Opportunities for Quantum Software and Asseco Poland

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Quantum and Asseco is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Quantum Software SA and Asseco Poland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Poland SA and Quantum Software 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 Quantum Software SA are associated (or correlated) with Asseco Poland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Poland SA has no effect on the direction of Quantum Software i.e., Quantum Software and Asseco Poland go up and down completely randomly.

Pair Corralation between Quantum Software and Asseco Poland

Assuming the 90 days trading horizon Quantum Software is expected to generate 1.16 times less return on investment than Asseco Poland. In addition to that, Quantum Software is 3.23 times more volatile than Asseco Poland SA. It trades about 0.01 of its total potential returns per unit of risk. Asseco Poland SA is currently generating about 0.04 per unit of volatility. If you would invest  7,727  in Asseco Poland SA on August 31, 2024 and sell it today you would earn a total of  1,348  from holding Asseco Poland SA or generate 17.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy87.67%
ValuesDaily Returns

Quantum Software SA  vs.  Asseco Poland SA

 Performance 
       Timeline  
Quantum Software 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Software SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Quantum Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Asseco Poland SA 

Risk-Adjusted Performance

0 of 100

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

Quantum Software and Asseco Poland Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Quantum Software and Asseco Poland

The main advantage of trading using opposite Quantum Software and Asseco Poland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum Software position performs unexpectedly, Asseco Poland 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 Poland will offset losses from the drop in Asseco Poland's long position.
The idea behind Quantum Software SA and Asseco Poland 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.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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