Correlation Between Astar and Aim Investment

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

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

Diversification Opportunities for Astar and Aim Investment

-0.91

Correlation Coefficient

Astar  Aim Investment

Pay attention - limited upside

The 3 months correlation between Astar and Aim is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs 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 Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Secs has no effect on the direction of Astar i.e., Astar and Aim Investment go up and down completely randomly.

Pair Corralation between Astar and Aim Investment

Assuming the 90 days trading horizon Astar is expected to under-perform the Aim Investment. In addition to that, Astar is 39.12 times more volatile than Aim Investment Secs. It trades about -0.17 of its total potential returns per unit of risk. Aim Investment Secs is currently generating about 0.13 per unit of volatility. If you would invest  99.00  in Aim Investment Secs on December 20, 2024 and sell it today you would earn a total of  1.00  from holding Aim Investment Secs or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	93.65%
Values	Daily Returns

Astar  vs.  Aim Investment Secs

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.

Aim Investment Secs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aim Investment Secs are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aim Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astar and Aim Investment

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

The idea behind Astar and Aim Investment Secs 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.