Correlation Between Astar and Electronics Fund

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

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

Diversification Opportunities for Astar and Electronics Fund

0.69

Correlation Coefficient

Astar  Electronics Fund

Poor diversification

The 3 months correlation between Astar and Electronics is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Electronics Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Fund Class 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 Electronics Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Fund Class has no effect on the direction of Astar i.e., Astar and Electronics Fund go up and down completely randomly.

Pair Corralation between Astar and Electronics Fund

Assuming the 90 days trading horizon Astar is expected to under-perform the Electronics Fund. In addition to that, Astar is 2.05 times more volatile than Electronics Fund Class. It trades about -0.19 of its total potential returns per unit of risk. Electronics Fund Class is currently generating about -0.07 per unit of volatility. If you would invest  38,807  in Electronics Fund Class on December 23, 2024 and sell it today you would lose (4,618) from holding Electronics Fund Class or give up 11.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.85%
Values	Daily Returns

Astar  vs.  Electronics Fund Class

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.

Electronics Fund Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electronics Fund Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Astar and Electronics Fund

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

The idea behind Astar and Electronics Fund Class 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.