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 15ON, 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

0.16

Correlation Coefficient

Astar  SINOPHARM GROUP

Average diversification

The 3 months correlation between Astar and SINOPHARM is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astar and SINOPHARM GROUP 15ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPHARM GROUP 15ON 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 15ON 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 generate 1.14 times less return on investment than SINOPHARM GROUP. In addition to that, Astar is 2.92 times more volatile than SINOPHARM GROUP 15ON. It trades about 0.01 of its total potential returns per unit of risk. SINOPHARM GROUP 15ON is currently generating about 0.03 per unit of volatility. If you would invest  1,190  in SINOPHARM GROUP 15ON on October 26, 2024 and sell it today you would earn a total of  30.00  from holding SINOPHARM GROUP 15ON or generate 2.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Astar  vs.  SINOPHARM GROUP 15ON

Astar

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Astar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Astar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SINOPHARM GROUP 15ON

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SINOPHARM GROUP 15ON are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SINOPHARM GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 15ON 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 Global Correlations module to find global opportunities by holding instruments from different markets.