Correlation Between Beta ETF and Asseco Business

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

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

Diversification Opportunities for Beta ETF and Asseco Business

-0.31

Correlation Coefficient

Beta ETF  Asseco Business

Very good diversification

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

Pair Corralation between Beta ETF and Asseco Business

Assuming the 90 days trading horizon Beta ETF Nasdaq 100 is expected to generate 0.45 times more return on investment than Asseco Business. However, Beta ETF Nasdaq 100 is 2.2 times less risky than Asseco Business. It trades about 0.21 of its potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.01 per unit of risk. 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

Beta ETF Nasdaq 100  vs.  Asseco Business Solutions

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.

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.

Pair Trading with Beta ETF and Asseco Business

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

The idea behind Beta ETF Nasdaq 100 and Asseco Business Solutions 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.