Correlation Between Astar and Jung Shing

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

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

Diversification Opportunities for Astar and Jung Shing

-0.1

Correlation Coefficient

Astar  Jung Shing

Good diversification

The 3 months correlation between Astar and Jung is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Jung Shing Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jung Shing Wire 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 Jung Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jung Shing Wire has no effect on the direction of Astar i.e., Astar and Jung Shing go up and down completely randomly.

Pair Corralation between Astar and Jung Shing

Assuming the 90 days trading horizon Astar is expected to generate 2.56 times more return on investment than Jung Shing. However, Astar is 2.56 times more volatile than Jung Shing Wire. It trades about 0.02 of its potential returns per unit of risk. Jung Shing Wire is currently generating about -0.16 per unit of risk. If you would invest  5.48  in Astar on October 25, 2024 and sell it today you would lose (0.14) from holding Astar or give up 2.55% of portfolio value over 90 days.

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

Astar  vs.  Jung Shing Wire

Astar

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jung Shing Wire

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jung Shing Wire has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Astar and Jung Shing

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

The idea behind Astar and Jung Shing Wire 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.