Correlation Between Astar and Ocean GeoLoop

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

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

Diversification Opportunities for Astar and Ocean GeoLoop

-0.62

Correlation Coefficient

Astar  Ocean GeoLoop

Excellent diversification

The 3 months correlation between Astar and Ocean is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Ocean GeoLoop AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean GeoLoop AS 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 Ocean GeoLoop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean GeoLoop AS has no effect on the direction of Astar i.e., Astar and Ocean GeoLoop go up and down completely randomly.

Pair Corralation between Astar and Ocean GeoLoop

Assuming the 90 days trading horizon Astar is expected to under-perform the Ocean GeoLoop. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 2.37 times less risky than Ocean GeoLoop. The crypto coin trades about -0.08 of its potential returns per unit of risk. The Ocean GeoLoop AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  390.00  in Ocean GeoLoop AS on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Ocean GeoLoop AS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	80.95%
Values	Daily Returns

Astar  vs.  Ocean GeoLoop AS

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.

Ocean GeoLoop AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean GeoLoop AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Astar and Ocean GeoLoop

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

The idea behind Astar and Ocean GeoLoop AS 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.