Correlation Between Remgro and Astoria Investments

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Can any of the company-specific risk be diversified away by investing in both Remgro and Astoria Investments 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 Remgro and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Remgro and Astoria Investments, you can compare the effects of market volatilities on Remgro and Astoria Investments 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 Remgro with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remgro and Astoria Investments.

Diversification Opportunities for Remgro and Astoria Investments

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Remgro and Astoria is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Remgro and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Remgro 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 Remgro are associated (or correlated) with Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Remgro i.e., Remgro and Astoria Investments go up and down completely randomly.

Pair Corralation between Remgro and Astoria Investments

Assuming the 90 days trading horizon Remgro is expected to under-perform the Astoria Investments. But the stock apears to be less risky and, when comparing its historical volatility, Remgro is 1.58 times less risky than Astoria Investments. The stock trades about -0.27 of its potential returns per unit of risk. The Astoria Investments is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  85,000  in Astoria Investments on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Astoria Investments or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Remgro  vs.  Astoria Investments

 Performance 
       Timeline  
Remgro 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

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

Remgro and Astoria Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Remgro and Astoria Investments

The main advantage of trading using opposite Remgro and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remgro position performs unexpectedly, Astoria Investments 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 Astoria Investments will offset losses from the drop in Astoria Investments' long position.
The idea behind Remgro and Astoria Investments 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.
Check out your portfolio center.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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