Correlation Between Astec Industries and Ideanomics

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

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

Diversification Opportunities for Astec Industries and Ideanomics

-0.4

Correlation Coefficient

Astec Industries  Ideanomics

Very good diversification

The 3 months correlation between Astec and Ideanomics is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics 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 Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Astec Industries i.e., Astec Industries and Ideanomics go up and down completely randomly.

Pair Corralation between Astec Industries and Ideanomics

Given the investment horizon of 90 days Astec Industries is expected to generate 1104.45 times less return on investment than Ideanomics. But when comparing it to its historical volatility, Astec Industries is 118.03 times less risky than Ideanomics. It trades about 0.05 of its potential returns per unit of risk. Ideanomics is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  0.36  in Ideanomics on December 30, 2024 and sell it today you would earn a total of  5.14  from holding Ideanomics or generate 1427.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.23%
Values	Daily Returns

Astec Industries  vs.  Ideanomics

Astec Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Astec Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Astec Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ideanomics

Risk-Adjusted Performance

Very Strong

Over the last 90 days Ideanomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astec Industries and Ideanomics

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

The idea behind Astec Industries and Ideanomics 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.