Correlation Between Astor Star and Semiconductor Ultrasector

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

By analyzing existing cross correlation between Astor Star Fund and Semiconductor Ultrasector Profund, you can compare the effects of market volatilities on Astor Star and Semiconductor Ultrasector 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 Astor Star with a short position of Semiconductor Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Star and Semiconductor Ultrasector.

Diversification Opportunities for Astor Star and Semiconductor Ultrasector

0.37

Correlation Coefficient

Astor Star  Semiconductor Ultrasector

Weak diversification

The 3 months correlation between Astor and Semiconductor is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Astor Star Fund and Semiconductor Ultrasector Prof in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Ultrasector and Astor Star 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 Astor Star Fund are associated (or correlated) with Semiconductor Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Ultrasector has no effect on the direction of Astor Star i.e., Astor Star and Semiconductor Ultrasector go up and down completely randomly.

Pair Corralation between Astor Star and Semiconductor Ultrasector

Assuming the 90 days horizon Astor Star Fund is expected to generate 0.18 times more return on investment than Semiconductor Ultrasector. However, Astor Star Fund is 5.53 times less risky than Semiconductor Ultrasector. It trades about 0.06 of its potential returns per unit of risk. Semiconductor Ultrasector Profund is currently generating about -0.12 per unit of risk. If you would invest  1,595  in Astor Star Fund on October 23, 2024 and sell it today you would earn a total of  13.00  from holding Astor Star Fund or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Astor Star Fund  vs.  Semiconductor Ultrasector Prof

Astor Star Fund

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Star Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Astor Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Semiconductor Ultrasector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Semiconductor Ultrasector Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Semiconductor Ultrasector is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astor Star and Semiconductor Ultrasector

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

The idea behind Astor Star Fund and Semiconductor Ultrasector Profund 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.