Correlation Between Astoria Investments and Bytes Technology

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

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

Diversification Opportunities for Astoria Investments and Bytes Technology

-0.23

Correlation Coefficient

Astoria Investments  Bytes Technology

Very good diversification

The 3 months correlation between Astoria and Bytes is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology 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 Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of Astoria Investments i.e., Astoria Investments and Bytes Technology go up and down completely randomly.

Pair Corralation between Astoria Investments and Bytes Technology

Assuming the 90 days trading horizon Astoria Investments is expected to under-perform the Bytes Technology. But the stock apears to be less risky and, when comparing its historical volatility, Astoria Investments is 1.52 times less risky than Bytes Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Bytes Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  980,000  in Bytes Technology on December 30, 2024 and sell it today you would earn a total of  211,100  from holding Bytes Technology or generate 21.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Astoria Investments  vs.  Bytes Technology

Astoria Investments

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Astoria Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bytes Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bytes Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Bytes Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astoria Investments and Bytes Technology

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

The idea behind Astoria Investments and Bytes Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.