Correlation Between Asseco South and Enea SA

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

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

Diversification Opportunities for Asseco South and Enea SA

-0.2

Correlation Coefficient

Asseco South  Enea SA

Good diversification

The 3 months correlation between Asseco and Enea is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea SA and Asseco South 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 South Eastern are associated (or correlated) with Enea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea SA has no effect on the direction of Asseco South i.e., Asseco South and Enea SA go up and down completely randomly.

Pair Corralation between Asseco South and Enea SA

Assuming the 90 days trading horizon Asseco South Eastern is expected to under-perform the Enea SA. But the stock apears to be less risky and, when comparing its historical volatility, Asseco South Eastern is 1.35 times less risky than Enea SA. The stock trades about -0.03 of its potential returns per unit of risk. The Enea SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,104  in Enea SA on September 16, 2024 and sell it today you would earn a total of  91.00  from holding Enea SA or generate 8.24% return on investment over 90 days.

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

Asseco South Eastern  vs.  Enea SA

Asseco South Eastern

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco South Eastern are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Asseco South is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Enea SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enea SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enea SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Asseco South and Enea SA

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

The idea behind Asseco South Eastern and Enea 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 CEOs Directory module to screen CEOs from public companies around the world.