Correlation Between Astar and ZKB Silver

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

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

Diversification Opportunities for Astar and ZKB Silver

-0.41

Correlation Coefficient

Astar  ZKB Silver

Very good diversification

The 3 months correlation between Astar and ZKB is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Astar and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF 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 ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of Astar i.e., Astar and ZKB Silver go up and down completely randomly.

Pair Corralation between Astar and ZKB Silver

Assuming the 90 days trading horizon Astar is expected to under-perform the ZKB Silver. In addition to that, Astar is 3.9 times more volatile than ZKB Silver ETF. It trades about -0.15 of its total potential returns per unit of risk. ZKB Silver ETF is currently generating about 0.22 per unit of volatility. If you would invest  7,650  in ZKB Silver ETF on October 23, 2024 and sell it today you would earn a total of  353.00  from holding ZKB Silver ETF or generate 4.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.0%
Values	Daily Returns

Astar  vs.  ZKB Silver ETF

Astar

Risk-Adjusted Performance

0 of 100

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 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.

ZKB Silver ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZKB Silver ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ZKB Silver is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Astar and ZKB Silver

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

The idea behind Astar and ZKB Silver ETF 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.