Correlation Between Astoria Investments and Trellidor Holdings

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

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

Diversification Opportunities for Astoria Investments and Trellidor Holdings

-0.49

Correlation Coefficient

Astoria Investments  Trellidor Holdings

Very good diversification

The 3 months correlation between Astoria and Trellidor is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Trellidor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellidor Holdings 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 Trellidor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellidor Holdings has no effect on the direction of Astoria Investments i.e., Astoria Investments and Trellidor Holdings go up and down completely randomly.

Pair Corralation between Astoria Investments and Trellidor Holdings

Assuming the 90 days trading horizon Astoria Investments is expected to under-perform the Trellidor Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Astoria Investments is 3.75 times less risky than Trellidor Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Trellidor Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  17,400  in Trellidor Holdings on December 24, 2024 and sell it today you would earn a total of  3,600  from holding Trellidor Holdings or generate 20.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Astoria Investments  vs.  Trellidor Holdings

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.

Trellidor Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trellidor Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Trellidor Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astoria Investments and Trellidor Holdings

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

The idea behind Astoria Investments and Trellidor Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.