Correlation Between Astar and Alephium

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Can any of the company-specific risk be diversified away by investing in both Astar and Alephium 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 Alephium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Alephium, you can compare the effects of market volatilities on Astar and Alephium 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 Alephium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Alephium.

Diversification Opportunities for Astar and Alephium

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Astar and Alephium is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Alephium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alephium 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 Alephium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alephium has no effect on the direction of Astar i.e., Astar and Alephium go up and down completely randomly.

Pair Corralation between Astar and Alephium

Assuming the 90 days trading horizon Astar is expected to generate 8.53 times less return on investment than Alephium. But when comparing it to its historical volatility, Astar is 7.52 times less risky than Alephium. It trades about 0.05 of its potential returns per unit of risk. Alephium is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Alephium on October 9, 2024 and sell it today you would earn a total of  126.00  from holding Alephium or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy57.89%
ValuesDaily Returns

Astar  vs.  Alephium

 Performance 
       Timeline  
Astar 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
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.
Alephium 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Alephium are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Alephium exhibited solid returns over the last few months and may actually be approaching a breakup point.

Astar and Alephium Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Astar and Alephium

The main advantage of trading using opposite Astar and Alephium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Alephium 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 Alephium will offset losses from the drop in Alephium's long position.
The idea behind Astar and Alephium 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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