Correlation Between ASOS Plc and Allegroeu

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

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

Diversification Opportunities for ASOS Plc and Allegroeu

0.0

Correlation Coefficient

ASOS Plc  Allegroeu

Pay attention - limited upside

The 3 months correlation between ASOS and Allegroeu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASOS plc PK and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu SA and ASOS Plc 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 ASOS plc PK are associated (or correlated) with Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of ASOS Plc i.e., ASOS Plc and Allegroeu go up and down completely randomly.

Pair Corralation between ASOS Plc and Allegroeu

If you would invest  484.00  in ASOS plc PK on September 8, 2024 and sell it today you would earn a total of  6.00  from holding ASOS plc PK or generate 1.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.56%
Values	Daily Returns

ASOS plc PK  vs.  Allegroeu SA

ASOS plc PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASOS plc PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Allegroeu SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allegroeu SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Allegroeu is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ASOS Plc and Allegroeu

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

The idea behind ASOS plc PK and Allegroeu 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.