Correlation Between INtRON Biotechnology and ASTORY CoLtd

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

By analyzing existing cross correlation between iNtRON Biotechnology and ASTORY CoLtd, you can compare the effects of market volatilities on INtRON Biotechnology and ASTORY CoLtd 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 INtRON Biotechnology with a short position of ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and ASTORY CoLtd.

Diversification Opportunities for INtRON Biotechnology and ASTORY CoLtd

-0.38

Correlation Coefficient

INtRON Biotechnology  ASTORY CoLtd

Very good diversification

The 3 months correlation between INtRON and ASTORY is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and ASTORY CoLtd go up and down completely randomly.

Pair Corralation between INtRON Biotechnology and ASTORY CoLtd

Assuming the 90 days trading horizon INtRON Biotechnology is expected to generate 6.27 times less return on investment than ASTORY CoLtd. In addition to that, INtRON Biotechnology is 1.12 times more volatile than ASTORY CoLtd. It trades about 0.01 of its total potential returns per unit of risk. ASTORY CoLtd is currently generating about 0.08 per unit of volatility. If you would invest  714,000  in ASTORY CoLtd on October 7, 2024 and sell it today you would earn a total of  66,000  from holding ASTORY CoLtd or generate 9.24% return on investment over 90 days.

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

iNtRON Biotechnology  vs.  ASTORY CoLtd

iNtRON Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iNtRON Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INtRON Biotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ASTORY CoLtd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASTORY CoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ASTORY CoLtd may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INtRON Biotechnology and ASTORY CoLtd

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

The idea behind iNtRON Biotechnology and ASTORY CoLtd 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.