Correlation Between Renergen and Astoria Investments

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

By analyzing existing cross correlation between Renergen and Astoria Investments, you can compare the effects of market volatilities on Renergen 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 Renergen with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renergen and Astoria Investments.

Diversification Opportunities for Renergen and Astoria Investments

-0.21

Correlation Coefficient

Renergen  Astoria Investments

Very good diversification

The 3 months correlation between Renergen and Astoria is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Renergen and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Renergen 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 Renergen 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 Renergen i.e., Renergen and Astoria Investments go up and down completely randomly.

Pair Corralation between Renergen and Astoria Investments

Assuming the 90 days trading horizon Renergen is expected to under-perform the Astoria Investments. In addition to that, Renergen is 1.55 times more volatile than Astoria Investments. It trades about -0.42 of its total potential returns per unit of risk. Astoria Investments is currently generating about 0.0 per unit of volatility. If you would invest  86,500  in Astoria Investments on October 15, 2024 and sell it today you would lose (1,500) from holding Astoria Investments or give up 1.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Renergen  vs.  Astoria Investments

Renergen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Renergen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Astoria Investments

Risk-Adjusted Performance

0 of 100

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Renergen and Astoria Investments

The main advantage of trading using opposite Renergen and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renergen 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 Renergen 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.