Correlation Between Astar and CHURCH

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

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

Diversification Opportunities for Astar and CHURCH

0.7

Correlation Coefficient

Astar  CHURCH

Poor diversification

The 3 months correlation between Astar and CHURCH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Astar and CHURCH DWIGHT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHURCH DWIGHT INC 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 CHURCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHURCH DWIGHT INC has no effect on the direction of Astar i.e., Astar and CHURCH go up and down completely randomly.

Pair Corralation between Astar and CHURCH

Assuming the 90 days trading horizon Astar is expected to under-perform the CHURCH. In addition to that, Astar is 3.62 times more volatile than CHURCH DWIGHT INC. It trades about -0.19 of its total potential returns per unit of risk. CHURCH DWIGHT INC is currently generating about 0.23 per unit of volatility. If you would invest  7,709  in CHURCH DWIGHT INC on December 23, 2024 and sell it today you would earn a total of  528.00  from holding CHURCH DWIGHT INC or generate 6.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.85%
Values	Daily Returns

Astar  vs.  CHURCH DWIGHT INC

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.

CHURCH DWIGHT INC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CHURCH DWIGHT INC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, CHURCH sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astar and CHURCH

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

The idea behind Astar and CHURCH DWIGHT INC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.