Correlation Between Astar and MabCure

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

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

Diversification Opportunities for Astar and MabCure

0.0

Correlation Coefficient

Astar  MabCure

Pay attention - limited upside

The 3 months correlation between Astar and MabCure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astar and MabCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MabCure 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 MabCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MabCure has no effect on the direction of Astar i.e., Astar and MabCure go up and down completely randomly.

Pair Corralation between Astar and MabCure

Assuming the 90 days trading horizon Astar is expected to generate 14.59 times less return on investment than MabCure. But when comparing it to its historical volatility, Astar is 9.38 times less risky than MabCure. It trades about 0.05 of its potential returns per unit of risk. MabCure is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.02  in MabCure on October 10, 2024 and sell it today you would lose (0.01) from holding MabCure or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Astar  vs.  MabCure

Astar

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 3 (%) 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.

MabCure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MabCure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, MabCure is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Astar and MabCure

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

The idea behind Astar and MabCure 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.