Correlation Between Astoria Investments and Mr Price

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

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

Diversification Opportunities for Astoria Investments and Mr Price

0.15

Correlation Coefficient

Astoria Investments  Mr Price

Average diversification

The 3 months correlation between Astoria and MRP is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Mr Price Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Price Group 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 Mr Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Price Group has no effect on the direction of Astoria Investments i.e., Astoria Investments and Mr Price go up and down completely randomly.

Pair Corralation between Astoria Investments and Mr Price

Assuming the 90 days trading horizon Astoria Investments is expected to under-perform the Mr Price. In addition to that, Astoria Investments is 1.16 times more volatile than Mr Price Group. It trades about -0.02 of its total potential returns per unit of risk. Mr Price Group is currently generating about 0.13 per unit of volatility. If you would invest  2,556,685  in Mr Price Group on October 7, 2024 and sell it today you would earn a total of  363,415  from holding Mr Price Group or generate 14.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Astoria Investments  vs.  Mr Price Group

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

Mr Price Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mr Price Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Mr Price exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astoria Investments and Mr Price

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

The idea behind Astoria Investments and Mr Price Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.