Correlation Between Astar and Wildpack Beverage

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

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

Diversification Opportunities for Astar and Wildpack Beverage

0.61

Correlation Coefficient

Astar  Wildpack Beverage

Poor diversification

The 3 months correlation between Astar and Wildpack is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Wildpack Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wildpack Beverage 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 Wildpack Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wildpack Beverage has no effect on the direction of Astar i.e., Astar and Wildpack Beverage go up and down completely randomly.

Pair Corralation between Astar and Wildpack Beverage

Assuming the 90 days trading horizon Astar is expected to under-perform the Wildpack Beverage. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 4.11 times less risky than Wildpack Beverage. The crypto coin trades about -0.19 of its potential returns per unit of risk. The Wildpack Beverage is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Wildpack Beverage on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Wildpack Beverage or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.31%
Values	Daily Returns

Astar  vs.  Wildpack Beverage

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.

Wildpack Beverage

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wildpack Beverage are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Wildpack Beverage showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and Wildpack Beverage

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

The idea behind Astar and Wildpack Beverage 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.