Correlation Between Astra Energy and Eco Wave

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

By analyzing existing cross correlation between Astra Energy and Eco Wave Power, you can compare the effects of market volatilities on Astra Energy and Eco Wave 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 Energy with a short position of Eco Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Energy and Eco Wave.

Diversification Opportunities for Astra Energy and Eco Wave

-0.66

Correlation Coefficient

Astra Energy  Eco Wave

Excellent diversification

The 3 months correlation between Astra and Eco is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Astra Energy and Eco Wave Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Wave Power and Astra Energy 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 Energy are associated (or correlated) with Eco Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Wave Power has no effect on the direction of Astra Energy i.e., Astra Energy and Eco Wave go up and down completely randomly.

Pair Corralation between Astra Energy and Eco Wave

Given the investment horizon of 90 days Astra Energy is expected to under-perform the Eco Wave. But the otc stock apears to be less risky and, when comparing its historical volatility, Astra Energy is 1.29 times less risky than Eco Wave. The otc stock trades about -0.04 of its potential returns per unit of risk. The Eco Wave Power is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  592.00  in Eco Wave Power on September 28, 2024 and sell it today you would earn a total of  808.00  from holding Eco Wave Power or generate 136.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Astra Energy  vs.  Eco Wave Power

Astra Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Eco Wave Power

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Wave Power are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Eco Wave exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra Energy and Eco Wave

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

The idea behind Astra Energy and Eco Wave Power 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.