Correlation Between Astar and Chesapeake Gold

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

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

Diversification Opportunities for Astar and Chesapeake Gold

-0.51

Correlation Coefficient

Astar  Chesapeake Gold

Excellent diversification

The 3 months correlation between Astar and Chesapeake is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Chesapeake Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Gold 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 Chesapeake Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Gold Corp has no effect on the direction of Astar i.e., Astar and Chesapeake Gold go up and down completely randomly.

Pair Corralation between Astar and Chesapeake Gold

Assuming the 90 days trading horizon Astar is expected to under-perform the Chesapeake Gold. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 1.03 times less risky than Chesapeake Gold. The crypto coin trades about -0.01 of its potential returns per unit of risk. The Chesapeake Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  68.00  in Chesapeake Gold Corp on October 9, 2024 and sell it today you would lose (1.00) from holding Chesapeake Gold Corp or give up 1.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Astar  vs.  Chesapeake Gold Corp

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.

Chesapeake Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chesapeake Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Astar and Chesapeake Gold

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

The idea behind Astar and Chesapeake Gold 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.