Correlation Between Astoria Investments and Boxer Retail

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

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

Diversification Opportunities for Astoria Investments and Boxer Retail

0.09

Correlation Coefficient

Astoria Investments  Boxer Retail

Significant diversification

The 3 months correlation between Astoria and Boxer is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Boxer Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxer Retail and Astoria Investments 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 Astoria Investments are associated (or correlated) with Boxer Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxer Retail has no effect on the direction of Astoria Investments i.e., Astoria Investments and Boxer Retail go up and down completely randomly.

Pair Corralation between Astoria Investments and Boxer Retail

Assuming the 90 days trading horizon Astoria Investments is expected to generate 28.83 times less return on investment than Boxer Retail. But when comparing it to its historical volatility, Astoria Investments is 3.76 times less risky than Boxer Retail. It trades about 0.03 of its potential returns per unit of risk. Boxer Retail is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  540,000  in Boxer Retail on September 20, 2024 and sell it today you would earn a total of  105,000  from holding Boxer Retail or generate 19.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.19%
Values	Daily Returns

Astoria Investments  vs.  Boxer Retail

Astoria Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astoria Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Boxer Retail

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boxer Retail are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Boxer Retail exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astoria Investments and Boxer Retail

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

The idea behind Astoria Investments and Boxer Retail 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.