Correlation Between Astoria Investments and Dipula Income

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

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

Diversification Opportunities for Astoria Investments and Dipula Income

0.36

Correlation Coefficient

Astoria Investments  Dipula Income

Weak diversification

The 3 months correlation between Astoria and Dipula is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Dipula Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dipula Income 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 Dipula Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dipula Income has no effect on the direction of Astoria Investments i.e., Astoria Investments and Dipula Income go up and down completely randomly.

Pair Corralation between Astoria Investments and Dipula Income

Assuming the 90 days trading horizon Astoria Investments is expected to under-perform the Dipula Income. In addition to that, Astoria Investments is 1.12 times more volatile than Dipula Income. It trades about -0.05 of its total potential returns per unit of risk. Dipula Income is currently generating about -0.03 per unit of volatility. If you would invest  53,400  in Dipula Income on December 30, 2024 and sell it today you would lose (1,900) from holding Dipula Income or give up 3.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Astoria Investments  vs.  Dipula Income

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.

Dipula Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dipula Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Dipula Income is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Astoria Investments and Dipula Income

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

The idea behind Astoria Investments and Dipula Income 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.