Correlation Between CurrentC Power and Astra Veda

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

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

Diversification Opportunities for CurrentC Power and Astra Veda

0.33

Correlation Coefficient

CurrentC Power  Astra Veda

Weak diversification

The 3 months correlation between CurrentC and Astra is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CurrentC Power and Astra Veda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Veda and CurrentC Power 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 CurrentC Power are associated (or correlated) with Astra Veda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Veda has no effect on the direction of CurrentC Power i.e., CurrentC Power and Astra Veda go up and down completely randomly.

Pair Corralation between CurrentC Power and Astra Veda

Given the investment horizon of 90 days CurrentC Power is expected to generate 3.61 times more return on investment than Astra Veda. However, CurrentC Power is 3.61 times more volatile than Astra Veda. It trades about 0.2 of its potential returns per unit of risk. Astra Veda is currently generating about 0.11 per unit of risk. If you would invest  20.00  in CurrentC Power on December 1, 2024 and sell it today you would lose (11.05) from holding CurrentC Power or give up 55.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

CurrentC Power  vs.  Astra Veda

CurrentC Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Astra Veda

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astra Veda are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Astra Veda sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CurrentC Power and Astra Veda

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

The idea behind CurrentC Power and Astra Veda 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.