Correlation Between Astar and SIG Combibloc

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

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

Diversification Opportunities for Astar and SIG Combibloc

-0.6

Correlation Coefficient

Astar  SIG Combibloc

Excellent diversification

The 3 months correlation between Astar and SIG is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Astar and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group 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 SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of Astar i.e., Astar and SIG Combibloc go up and down completely randomly.

Pair Corralation between Astar and SIG Combibloc

Assuming the 90 days trading horizon Astar is expected to under-perform the SIG Combibloc. In addition to that, Astar is 2.27 times more volatile than SIG Combibloc Group. It trades about -0.02 of its total potential returns per unit of risk. SIG Combibloc Group is currently generating about -0.01 per unit of volatility. If you would invest  2,129  in SIG Combibloc Group on October 12, 2024 and sell it today you would lose (158.00) from holding SIG Combibloc Group or give up 7.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.3%
Values	Daily Returns

Astar  vs.  SIG Combibloc Group

Astar

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Astar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SIG Combibloc Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIG Combibloc Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Astar and SIG Combibloc

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

The idea behind Astar and SIG Combibloc Group 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.