Correlation Between Astar and Columbia Sustainable

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

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

Diversification Opportunities for Astar and Columbia Sustainable

-0.34

Correlation Coefficient

Astar  Columbia Sustainable

Very good diversification

The 3 months correlation between Astar and Columbia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Columbia Sustainable Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sustainable 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 Columbia Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sustainable has no effect on the direction of Astar i.e., Astar and Columbia Sustainable go up and down completely randomly.

Pair Corralation between Astar and Columbia Sustainable

Assuming the 90 days trading horizon Astar is expected to under-perform the Columbia Sustainable. In addition to that, Astar is 6.43 times more volatile than Columbia Sustainable International. It trades about -0.02 of its total potential returns per unit of risk. Columbia Sustainable International is currently generating about 0.05 per unit of volatility. If you would invest  2,811  in Columbia Sustainable International on October 9, 2024 and sell it today you would earn a total of  135.00  from holding Columbia Sustainable International or generate 4.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.45%
Values	Daily Returns

Astar  vs.  Columbia Sustainable Internati

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.

Columbia Sustainable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Sustainable International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Columbia Sustainable is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Astar and Columbia Sustainable

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

The idea behind Astar and Columbia Sustainable International 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 Transaction History module to view history of all your transactions and understand their impact on performance.