Correlation Between Astar and Sriwahana

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

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

Diversification Opportunities for Astar and Sriwahana

-0.05

Correlation Coefficient

Astar  Sriwahana

Good diversification

The 3 months correlation between Astar and Sriwahana is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Sriwahana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriwahana 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 Sriwahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriwahana has no effect on the direction of Astar i.e., Astar and Sriwahana go up and down completely randomly.

Pair Corralation between Astar and Sriwahana

Assuming the 90 days trading horizon Astar is expected to under-perform the Sriwahana. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 1.02 times less risky than Sriwahana. The crypto coin trades about -0.13 of its potential returns per unit of risk. The Sriwahana is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,800  in Sriwahana on October 26, 2024 and sell it today you would lose (800.00) from holding Sriwahana or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.7%
Values	Daily Returns

Astar  vs.  Sriwahana

Astar

Risk-Adjusted Performance

0 of 100

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 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.

Sriwahana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sriwahana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Astar and Sriwahana

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

The idea behind Astar and Sriwahana 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.