Correlation Between Astar and Toppan Printing

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

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

Diversification Opportunities for Astar and Toppan Printing

-0.4

Correlation Coefficient

Astar  Toppan Printing

Very good diversification

The 3 months correlation between Astar and Toppan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Toppan Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toppan Printing 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 Toppan Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toppan Printing has no effect on the direction of Astar i.e., Astar and Toppan Printing go up and down completely randomly.

Pair Corralation between Astar and Toppan Printing

Assuming the 90 days trading horizon Astar is expected to under-perform the Toppan Printing. In addition to that, Astar is 1.34 times more volatile than Toppan Printing. It trades about -0.04 of its total potential returns per unit of risk. Toppan Printing is currently generating about 0.04 per unit of volatility. If you would invest  1,242  in Toppan Printing on October 25, 2024 and sell it today you would earn a total of  178.00  from holding Toppan Printing or generate 14.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.85%
Values	Daily Returns

Astar  vs.  Toppan Printing

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 unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Toppan Printing

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Toppan Printing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Toppan Printing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and Toppan Printing

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

The idea behind Astar and Toppan Printing 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.