Correlation Between Astar and ENRG Elements

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

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

Diversification Opportunities for Astar and ENRG Elements

-0.67

Correlation Coefficient

Astar  ENRG Elements

Excellent diversification

The 3 months correlation between Astar and ENRG is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astar and ENRG Elements Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENRG Elements Limited 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 ENRG Elements. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENRG Elements Limited has no effect on the direction of Astar i.e., Astar and ENRG Elements go up and down completely randomly.

Pair Corralation between Astar and ENRG Elements

Assuming the 90 days trading horizon Astar is expected to under-perform the ENRG Elements. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 1.52 times less risky than ENRG Elements. The crypto coin trades about -0.17 of its potential returns per unit of risk. The ENRG Elements Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.10  in ENRG Elements Limited on December 20, 2024 and sell it today you would earn a total of  0.06  from holding ENRG Elements Limited or generate 60.0% return on investment over 90 days.

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

Astar  vs.  ENRG Elements Limited

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.

ENRG Elements Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENRG Elements Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, ENRG Elements reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and ENRG Elements

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

The idea behind Astar and ENRG Elements Limited 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 CEOs Directory module to screen CEOs from public companies around the world.