Correlation Between Astar and Ten Ren

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

By analyzing existing cross correlation between Astar and Ten Ren Tea, you can compare the effects of market volatilities on Astar and Ten Ren 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 Astar with a short position of Ten Ren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Ten Ren.

Diversification Opportunities for Astar and Ten Ren

-0.14

Correlation Coefficient

Astar  Ten Ren

Good diversification

The 3 months correlation between Astar and Ten is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Ten Ren Tea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ten Ren Tea and Astar 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 Astar are associated (or correlated) with Ten Ren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ten Ren Tea has no effect on the direction of Astar i.e., Astar and Ten Ren go up and down completely randomly.

Pair Corralation between Astar and Ten Ren

Assuming the 90 days trading horizon Astar is expected to under-perform the Ten Ren. In addition to that, Astar is 5.59 times more volatile than Ten Ren Tea. It trades about -0.17 of its total potential returns per unit of risk. Ten Ren Tea is currently generating about 0.21 per unit of volatility. If you would invest  3,000  in Ten Ren Tea on December 20, 2024 and sell it today you would earn a total of  330.00  from holding Ten Ren Tea or generate 11.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

Astar  vs.  Ten Ren Tea

Astar

Risk-Adjusted Performance

Very Weak

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

Ten Ren Tea

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ten Ren Tea are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ten Ren may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Astar and Ten Ren

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

The idea behind Astar and Ten Ren Tea 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.