Correlation Between Astar and Autopistas Del

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

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

Diversification Opportunities for Astar and Autopistas Del

0.41

Correlation Coefficient

Astar  Autopistas Del

Very weak diversification

The 3 months correlation between Astar and Autopistas is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Autopistas del Sol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autopistas del Sol 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 Autopistas Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autopistas del Sol has no effect on the direction of Astar i.e., Astar and Autopistas Del go up and down completely randomly.

Pair Corralation between Astar and Autopistas Del

Assuming the 90 days trading horizon Astar is expected to under-perform the Autopistas Del. In addition to that, Astar is 2.15 times more volatile than Autopistas del Sol. It trades about -0.13 of its total potential returns per unit of risk. Autopistas del Sol is currently generating about -0.27 per unit of volatility. If you would invest  399,000  in Autopistas del Sol on October 24, 2024 and sell it today you would lose (44,000) from holding Autopistas del Sol or give up 11.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Astar  vs.  Autopistas del Sol

Astar

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 2 (%) 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.

Autopistas del Sol

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Autopistas del Sol are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Autopistas Del sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and Autopistas Del

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

The idea behind Astar and Autopistas del Sol 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .