Correlation Between Astar and Absalon Invest

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

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

Diversification Opportunities for Astar and Absalon Invest

0.0

Correlation Coefficient

Astar  Absalon Invest

Pay attention - limited upside

The 3 months correlation between Astar and Absalon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Absalon Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absalon Invest 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 Absalon Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absalon Invest has no effect on the direction of Astar i.e., Astar and Absalon Invest go up and down completely randomly.

Pair Corralation between Astar and Absalon Invest

If you would invest  5.76  in Astar on October 9, 2024 and sell it today you would earn a total of  0.97  from holding Astar or generate 16.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Astar  vs.  Absalon Invest

Astar

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Absalon Invest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Absalon Invest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Absalon Invest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astar and Absalon Invest

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

The idea behind Astar and Absalon Invest 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.

Check out your portfolio center.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.