Correlation Between Astar and Sinopharm Group

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

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

Diversification Opportunities for Astar and Sinopharm Group

0.21

Correlation Coefficient

Astar  Sinopharm Group

Modest diversification

The 3 months correlation between Astar and Sinopharm is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group 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 Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of Astar i.e., Astar and Sinopharm Group go up and down completely randomly.

Pair Corralation between Astar and Sinopharm Group

Assuming the 90 days trading horizon Astar is expected to under-perform the Sinopharm Group. In addition to that, Astar is 3.08 times more volatile than Sinopharm Group Co. It trades about -0.08 of its total potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.03 per unit of volatility. If you would invest  248.00  in Sinopharm Group Co on October 10, 2024 and sell it today you would earn a total of  2.00  from holding Sinopharm Group Co or generate 0.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.95%
Values	Daily Returns

Astar  vs.  Sinopharm Group Co

Astar

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 3 (%) 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.

Sinopharm Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sinopharm Group Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sinopharm Group is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Astar and Sinopharm Group

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

The idea behind Astar and Sinopharm Group Co 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.