Correlation Between Asseco Poland and Vee SA

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

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

Diversification Opportunities for Asseco Poland and Vee SA

-0.72

Correlation Coefficient

Asseco Poland  Vee SA

Pay attention - limited upside

The 3 months correlation between Asseco and Vee is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Poland SA and Vee SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vee SA and Asseco Poland 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 Poland SA are associated (or correlated) with Vee SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vee SA has no effect on the direction of Asseco Poland i.e., Asseco Poland and Vee SA go up and down completely randomly.

Pair Corralation between Asseco Poland and Vee SA

Assuming the 90 days trading horizon Asseco Poland SA is expected to generate 0.46 times more return on investment than Vee SA. However, Asseco Poland SA is 2.17 times less risky than Vee SA. It trades about 0.1 of its potential returns per unit of risk. Vee SA is currently generating about -0.28 per unit of risk. If you would invest  8,690  in Asseco Poland SA on September 28, 2024 and sell it today you would earn a total of  750.00  from holding Asseco Poland SA or generate 8.63% return on investment over 90 days.

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

Asseco Poland SA  vs.  Vee SA

Asseco Poland SA

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco Poland SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco Poland may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vee SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vee SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Asseco Poland and Vee SA

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

The idea behind Asseco Poland SA and Vee 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.