Correlation Between Astec Industries and Grow Solutions

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

By analyzing existing cross correlation between Astec Industries and Grow Solutions Holdings, you can compare the effects of market volatilities on Astec Industries and Grow Solutions 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 Astec Industries with a short position of Grow Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Industries and Grow Solutions.

Diversification Opportunities for Astec Industries and Grow Solutions

0.0

Correlation Coefficient

Astec Industries  Grow Solutions

Pay attention - limited upside

The 3 months correlation between Astec and Grow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Grow Solutions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grow Solutions Holdings and Astec Industries 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 Astec Industries are associated (or correlated) with Grow Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grow Solutions Holdings has no effect on the direction of Astec Industries i.e., Astec Industries and Grow Solutions go up and down completely randomly.

Pair Corralation between Astec Industries and Grow Solutions

If you would invest  0.00  in Grow Solutions Holdings on November 28, 2024 and sell it today you would earn a total of  0.00  from holding Grow Solutions Holdings or generate 0.0% return on investment over 90 days.

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

Astec Industries  vs.  Grow Solutions Holdings

Astec Industries

Risk-Adjusted Performance

Very Weak

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

Grow Solutions Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grow Solutions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grow Solutions is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Astec Industries and Grow Solutions

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

The idea behind Astec Industries and Grow Solutions 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.