Correlation Between Asseco Business and Beta ETF

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

By analyzing existing cross correlation between Asseco Business Solutions and Beta ETF Nasdaq 100, you can compare the effects of market volatilities on Asseco Business and Beta ETF 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 Asseco Business with a short position of Beta ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Business and Beta ETF.

Diversification Opportunities for Asseco Business and Beta ETF

-0.31

Correlation Coefficient

Asseco Business  Beta ETF

Very good diversification

The 3 months correlation between Asseco and Beta is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Business Solutions and Beta ETF Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta ETF Nasdaq and Asseco Business 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 Asseco Business Solutions are associated (or correlated) with Beta ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta ETF Nasdaq has no effect on the direction of Asseco Business i.e., Asseco Business and Beta ETF go up and down completely randomly.

Pair Corralation between Asseco Business and Beta ETF

Assuming the 90 days trading horizon Asseco Business is expected to generate 7.92 times less return on investment than Beta ETF. In addition to that, Asseco Business is 2.2 times more volatile than Beta ETF Nasdaq 100. It trades about 0.01 of its total potential returns per unit of risk. Beta ETF Nasdaq 100 is currently generating about 0.21 per unit of volatility. If you would invest  18,584  in Beta ETF Nasdaq 100 on September 16, 2024 and sell it today you would earn a total of  2,216  from holding Beta ETF Nasdaq 100 or generate 11.92% return on investment over 90 days.

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

Asseco Business Solutions  vs.  Beta ETF Nasdaq 100

Asseco Business Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

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

Beta ETF Nasdaq

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beta ETF Nasdaq 100 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Beta ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Asseco Business and Beta ETF

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

The idea behind Asseco Business Solutions and Beta ETF Nasdaq 100 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.