Correlation Between Astar and Bathurst Metals

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

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

Diversification Opportunities for Astar and Bathurst Metals

0.13

Correlation Coefficient

Astar  Bathurst Metals

Average diversification

The 3 months correlation between Astar and Bathurst is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Bathurst Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bathurst Metals Corp 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 Bathurst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bathurst Metals Corp has no effect on the direction of Astar i.e., Astar and Bathurst Metals go up and down completely randomly.

Pair Corralation between Astar and Bathurst Metals

Assuming the 90 days trading horizon Astar is expected to generate 46.75 times more return on investment than Bathurst Metals. However, Astar is 46.75 times more volatile than Bathurst Metals Corp. It trades about 0.03 of its potential returns per unit of risk. Bathurst Metals Corp is currently generating about -0.13 per unit of risk. If you would invest  5.43  in Astar on October 24, 2024 and sell it today you would earn a total of  0.09  from holding Astar or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Astar  vs.  Bathurst Metals Corp

Astar

Risk-Adjusted Performance

2 of 100

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.

Bathurst Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bathurst Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bathurst Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Astar and Bathurst Metals

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

The idea behind Astar and Bathurst Metals Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.