Correlation Between ASTRA INTERNATIONAL and SECURITAS

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

By analyzing existing cross correlation between ASTRA INTERNATIONAL and SECURITAS B , you can compare the effects of market volatilities on ASTRA INTERNATIONAL and SECURITAS 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 SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and SECURITAS.

Diversification Opportunities for ASTRA INTERNATIONAL and SECURITAS

-0.52

Correlation Coefficient

ASTRA INTERNATIONAL  SECURITAS

Excellent diversification

The 3 months correlation between ASTRA and SECURITAS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B 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 SECURITAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURITAS B has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and SECURITAS go up and down completely randomly.

Pair Corralation between ASTRA INTERNATIONAL and SECURITAS

Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to under-perform the SECURITAS. In addition to that, ASTRA INTERNATIONAL is 1.66 times more volatile than SECURITAS B . It trades about -0.08 of its total potential returns per unit of risk. SECURITAS B is currently generating about 0.23 per unit of volatility. If you would invest  1,182  in SECURITAS B on December 2, 2024 and sell it today you would earn a total of  207.00  from holding SECURITAS B or generate 17.51% return on investment over 90 days.

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

ASTRA INTERNATIONAL  vs.  SECURITAS B

ASTRA INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASTRA INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SECURITAS B

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SECURITAS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASTRA INTERNATIONAL and SECURITAS

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

The idea behind ASTRA INTERNATIONAL and SECURITAS B 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.