Correlation Between Vercom SA and Asseco South

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

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

Diversification Opportunities for Vercom SA and Asseco South

-0.03

Correlation Coefficient

Vercom SA  Asseco South

Good diversification

The 3 months correlation between Vercom and Asseco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Vercom SA 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 Vercom SA 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 Vercom SA 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 Vercom SA i.e., Vercom SA and Asseco South go up and down completely randomly.

Pair Corralation between Vercom SA and Asseco South

Assuming the 90 days trading horizon Vercom SA is expected to under-perform the Asseco South. In addition to that, Vercom SA is 1.5 times more volatile than Asseco South Eastern. It trades about -0.06 of its total potential returns per unit of risk. Asseco South Eastern is currently generating about 0.24 per unit of volatility. If you would invest  4,900  in Asseco South Eastern on December 30, 2024 and sell it today you would earn a total of  1,080  from holding Asseco South Eastern or generate 22.04% return on investment over 90 days.

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

Vercom SA  vs.  Asseco South Eastern

Vercom SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vercom SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Asseco South Eastern

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco South Eastern are ranked lower than 18 (%) 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.

Pair Trading with Vercom SA and Asseco South

The main advantage of trading using opposite Vercom SA and Asseco South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vercom SA 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 Vercom SA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.