Correlation Between Astar and Star Pacific

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

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

Diversification Opportunities for Astar and Star Pacific

-0.64

Correlation Coefficient

Astar  Star Pacific

Excellent diversification

The 3 months correlation between Astar and Star is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Star Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Pacific Tbk 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 Star Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Pacific Tbk has no effect on the direction of Astar i.e., Astar and Star Pacific go up and down completely randomly.

Pair Corralation between Astar and Star Pacific

Assuming the 90 days trading horizon Astar is expected to under-perform the Star Pacific. In addition to that, Astar is 1.14 times more volatile than Star Pacific Tbk. It trades about -0.19 of its total potential returns per unit of risk. Star Pacific Tbk is currently generating about 0.08 per unit of volatility. If you would invest  25,800  in Star Pacific Tbk on December 21, 2024 and sell it today you would earn a total of  4,200  from holding Star Pacific Tbk or generate 16.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.63%
Values	Daily Returns

Astar  vs.  Star Pacific Tbk

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.

Star Pacific Tbk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Star Pacific Tbk are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Star Pacific disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and Star Pacific

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

The idea behind Astar and Star Pacific Tbk 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.