Correlation Between Astar and WHG REAL

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

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

Diversification Opportunities for Astar and WHG REAL

-0.05

Correlation Coefficient

Astar  WHG REAL

Good diversification

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

Pair Corralation between Astar and WHG REAL

Assuming the 90 days trading horizon Astar is expected to generate 3.81 times more return on investment than WHG REAL. However, Astar is 3.81 times more volatile than WHG REAL ESTATE. It trades about 0.07 of its potential returns per unit of risk. WHG REAL ESTATE is currently generating about -0.11 per unit of risk. If you would invest  5.76  in Astar on October 9, 2024 and sell it today you would earn a total of  0.97  from holding Astar or generate 16.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

Astar  vs.  WHG REAL ESTATE

Astar

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar exhibited solid returns over the last few months and may actually be approaching a breakup point.

WHG REAL ESTATE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WHG REAL ESTATE has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Astar and WHG REAL

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

The idea behind Astar and WHG REAL ESTATE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.