Correlation Between Astar and Victory Integrity

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

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

Diversification Opportunities for Astar and Victory Integrity

0.32

Correlation Coefficient

Astar  Victory Integrity

Weak diversification

The 3 months correlation between Astar and Victory is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Victory Integrity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity Mid 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 Victory Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity Mid has no effect on the direction of Astar i.e., Astar and Victory Integrity go up and down completely randomly.

Pair Corralation between Astar and Victory Integrity

Assuming the 90 days trading horizon Astar is expected to generate 7.49 times more return on investment than Victory Integrity. However, Astar is 7.49 times more volatile than Victory Integrity Mid Cap. It trades about 0.05 of its potential returns per unit of risk. Victory Integrity Mid Cap is currently generating about 0.01 per unit of risk. If you would invest  4.20  in Astar on October 9, 2024 and sell it today you would earn a total of  2.53  from holding Astar or generate 60.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	59.88%
Values	Daily Returns

Astar  vs.  Victory Integrity Mid Cap

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.

Victory Integrity Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Victory Integrity Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Astar and Victory Integrity

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

The idea behind Astar and Victory Integrity Mid Cap 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.