Correlation Between Astar and Shih Wei

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

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

Diversification Opportunities for Astar and Shih Wei

-0.6

Correlation Coefficient

Astar  Shih Wei

Excellent diversification

The 3 months correlation between Astar and Shih is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Shih Wei Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Wei Navigation 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 Shih Wei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Wei Navigation has no effect on the direction of Astar i.e., Astar and Shih Wei go up and down completely randomly.

Pair Corralation between Astar and Shih Wei

Assuming the 90 days trading horizon Astar is expected to under-perform the Shih Wei. In addition to that, Astar is 1.91 times more volatile than Shih Wei Navigation. It trades about -0.18 of its total potential returns per unit of risk. Shih Wei Navigation is currently generating about 0.16 per unit of volatility. If you would invest  1,685  in Shih Wei Navigation on December 21, 2024 and sell it today you would earn a total of  385.00  from holding Shih Wei Navigation or generate 22.85% return on investment over 90 days.

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

Astar  vs.  Shih Wei Navigation

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.

Shih Wei Navigation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shih Wei Navigation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Shih Wei showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and Shih Wei

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

The idea behind Astar and Shih Wei Navigation 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.