Correlation Between Astar and Itafos Corp

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

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

Diversification Opportunities for Astar and Itafos Corp

0.19

Correlation Coefficient

Astar  Itafos Corp

Average diversification

The 3 months correlation between Astar and Itafos is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Itafos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itafos 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 Itafos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itafos Corp has no effect on the direction of Astar i.e., Astar and Itafos Corp go up and down completely randomly.

Pair Corralation between Astar and Itafos Corp

Assuming the 90 days trading horizon Astar is expected to generate 2.57 times more return on investment than Itafos Corp. However, Astar is 2.57 times more volatile than Itafos Corp. It trades about 0.04 of its potential returns per unit of risk. Itafos Corp is currently generating about 0.03 per unit of risk. If you would invest  4.70  in Astar on October 11, 2024 and sell it today you would earn a total of  1.42  from holding Astar or generate 30.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.12%
Values	Daily Returns

Astar  vs.  Itafos Corp

Astar

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Itafos Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Itafos Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Itafos Corp is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Astar and Itafos Corp

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

The idea behind Astar and Itafos 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.