Correlation Between Astar and Seix Us

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

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

Diversification Opportunities for Astar and Seix Us

0.54

Correlation Coefficient

Astar  Seix Us

Very weak diversification

The 3 months correlation between Astar and Seix is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Seix Govt Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seix Govt Sec 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 Seix Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seix Govt Sec has no effect on the direction of Astar i.e., Astar and Seix Us go up and down completely randomly.

Pair Corralation between Astar and Seix Us

Assuming the 90 days trading horizon Astar is expected to generate 84.04 times more return on investment than Seix Us. However, Astar is 84.04 times more volatile than Seix Govt Sec. It trades about 0.04 of its potential returns per unit of risk. Seix Govt Sec is currently generating about 0.21 per unit of risk. If you would invest  4.70  in Astar on October 11, 2024 and sell it today you would earn a total of  1.31  from holding Astar or generate 27.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	60.08%
Values	Daily Returns

Astar  vs.  Seix Govt Sec

Astar

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Seix Govt Sec

Risk-Adjusted Performance

11 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Seix Govt Sec are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Seix Us 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 Seix Us

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

The idea behind Astar and Seix Govt Sec 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.