Correlation Between Astar and Synthomer Plc

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

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

Diversification Opportunities for Astar and Synthomer Plc

0.6

Correlation Coefficient

Astar  Synthomer Plc

Poor diversification

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

Pair Corralation between Astar and Synthomer Plc

Assuming the 90 days trading horizon Astar is expected to under-perform the Synthomer Plc. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 1.08 times less risky than Synthomer Plc. The crypto coin trades about -0.19 of its potential returns per unit of risk. The Synthomer plc is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  377.00  in Synthomer plc on December 22, 2024 and sell it today you would lose (155.00) from holding Synthomer plc or give up 41.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.31%
Values	Daily Returns

Astar  vs.  Synthomer plc

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.

Synthomer plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Synthomer plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Astar and Synthomer Plc

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

The idea behind Astar and Synthomer plc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.