Correlation Between Trematon Capital and Astoria Investments

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

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

Diversification Opportunities for Trematon Capital and Astoria Investments

-0.19

Correlation Coefficient

Trematon Capital  Astoria Investments

Good diversification

The 3 months correlation between Trematon and Astoria is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Trematon Capital 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 Trematon Capital Investments 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 Trematon Capital i.e., Trematon Capital and Astoria Investments go up and down completely randomly.

Pair Corralation between Trematon Capital and Astoria Investments

Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 2.47 times more return on investment than Astoria Investments. However, Trematon Capital is 2.47 times more volatile than Astoria Investments. It trades about 0.02 of its potential returns per unit of risk. Astoria Investments is currently generating about 0.05 per unit of risk. If you would invest  23,500  in Trematon Capital Investments on October 20, 2024 and sell it today you would lose (100.00) from holding Trematon Capital Investments or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Trematon Capital Investments  vs.  Astoria Investments

Trematon Capital Inv

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trematon Capital Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Trematon Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Astoria Investments

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Astoria Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Trematon Capital and Astoria Investments

The main advantage of trading using opposite Trematon Capital and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital 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 Trematon Capital Investments 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.