Correlation Between Astar and Gmo Resources

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

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

Diversification Opportunities for Astar and Gmo Resources

0.47

Correlation Coefficient

Astar  Gmo Resources

Very weak diversification

The 3 months correlation between Astar and Gmo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Gmo Resources Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Resources 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 Gmo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Resources has no effect on the direction of Astar i.e., Astar and Gmo Resources go up and down completely randomly.

Pair Corralation between Astar and Gmo Resources

Assuming the 90 days trading horizon Astar is expected to under-perform the Gmo Resources. In addition to that, Astar is 4.0 times more volatile than Gmo Resources Fund. It trades about -0.18 of its total potential returns per unit of risk. Gmo Resources Fund is currently generating about -0.01 per unit of volatility. If you would invest  1,789  in Gmo Resources Fund on December 19, 2024 and sell it today you would lose (16.00) from holding Gmo Resources Fund or give up 0.89% of portfolio value over 90 days.

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

Astar  vs.  Gmo Resources Fund

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.

Gmo Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gmo Resources Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Gmo Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astar and Gmo Resources

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

The idea behind Astar and Gmo Resources Fund 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.