Correlation Between Aster DM and UFO Moviez

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

By analyzing existing cross correlation between Aster DM Healthcare and UFO Moviez India, you can compare the effects of market volatilities on Aster DM and UFO Moviez 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 Aster DM with a short position of UFO Moviez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aster DM and UFO Moviez.

Diversification Opportunities for Aster DM and UFO Moviez

-0.42

Correlation Coefficient

Aster DM  UFO Moviez

Very good diversification

The 3 months correlation between Aster and UFO is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aster DM Healthcare and UFO Moviez India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFO Moviez India and Aster DM 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 Aster DM Healthcare are associated (or correlated) with UFO Moviez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFO Moviez India has no effect on the direction of Aster DM i.e., Aster DM and UFO Moviez go up and down completely randomly.

Pair Corralation between Aster DM and UFO Moviez

Assuming the 90 days trading horizon Aster DM Healthcare is expected to generate 0.99 times more return on investment than UFO Moviez. However, Aster DM Healthcare is 1.01 times less risky than UFO Moviez. It trades about 0.29 of its potential returns per unit of risk. UFO Moviez India is currently generating about 0.15 per unit of risk. If you would invest  43,305  in Aster DM Healthcare on September 20, 2024 and sell it today you would earn a total of  6,195  from holding Aster DM Healthcare or generate 14.31% return on investment over 90 days.

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

Aster DM Healthcare  vs.  UFO Moviez India

Aster DM Healthcare

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aster DM Healthcare are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Aster DM displayed solid returns over the last few months and may actually be approaching a breakup point.

UFO Moviez India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UFO Moviez India 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 technical and fundamental 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.

Pair Trading with Aster DM and UFO Moviez

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

The idea behind Aster DM Healthcare and UFO Moviez India 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.