Correlation Between ASTRA INTERNATIONAL and PICKN PAY

Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL and PICKN PAY 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 ASTRA INTERNATIONAL and PICKN PAY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASTRA INTERNATIONAL and PICKN PAY STORES, you can compare the effects of market volatilities on ASTRA INTERNATIONAL and PICKN PAY 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 ASTRA INTERNATIONAL with a short position of PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and PICKN PAY.

Diversification Opportunities for ASTRA INTERNATIONAL and PICKN PAY

-0.27

Correlation Coefficient

ASTRA INTERNATIONAL  PICKN PAY

Very good diversification

The 3 months correlation between ASTRA and PICKN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL are associated (or correlated) with PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and PICKN PAY go up and down completely randomly.

Pair Corralation between ASTRA INTERNATIONAL and PICKN PAY

Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to generate 4.39 times less return on investment than PICKN PAY. But when comparing it to its historical volatility, ASTRA INTERNATIONAL is 1.26 times less risky than PICKN PAY. It trades about 0.05 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  114.00  in PICKN PAY STORES on September 11, 2024 and sell it today you would earn a total of  43.00  from holding PICKN PAY STORES or generate 37.72% return on investment over 90 days.

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

ASTRA INTERNATIONAL  vs.  PICKN PAY STORES

ASTRA INTERNATIONAL

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASTRA INTERNATIONAL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ASTRA INTERNATIONAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PICKN PAY STORES

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PICKN PAY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASTRA INTERNATIONAL and PICKN PAY

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

The idea behind ASTRA INTERNATIONAL and PICKN PAY STORES 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.